Trump Tariffs Highlights: Amid trade war with US, China’s first quarter economy grows by 5.4%

Seeking to isolate the U.S. diplomatically, China has proposed a G20 declaration in support of multilateral trade. But European diplomats remain wary of Beijing’s subsidy practices and industrial overcapacity. Still, this effort reflects China’s strategic pivot—framing the trade war as not just bilateral but a broader fight over global rules.

Reuters

China rolled out retaliatory tariffs hours before U.S. markets opened on April 4, drawing on lessons from past trade fights. A team of officials prepared a playbook including levies and export restrictions. Xi’s fast, centralized decision-making mirrors China’s COVID-era response style—swift, opaque, and forceful—with Wall Street reacting in real time.

During Trump’s first term, communication with Beijing ran through figures like Jared Kushner. This time, China is unsure who truly represents Trump, and multiple attempts to contact key U.S. officials have failed. From Elon Musk to Secretary Rubio, Chinese outreach has met silence, raising doubts about meaningful dialogue resuming soon.

Reuters

Trump’s sweeping tariffs shocked global markets and prompted swift Chinese retaliation. With most U.S.-China trade now frozen, Beijing is cracking down on American services, films, and travel. Officials say China is ready to bear economic pain, betting that American voters won’t tolerate the same hardships in a prolonged trade war.

Reuters

China has quietly reached out to allies of the U.S., including Japan and South Korea, seeking to build diplomatic resistance against Trump’s tariffs. Letters and direct engagement have emphasized cooperation and multipolarity. These behind-the-scenes efforts highlight Beijing’s bid to internationalize its opposition and erode the US strategy through global alliances.

Reuters

Communist Party propaganda officials have launched a patriotic media campaign, featuring Mao Zedong declaring, “we will never yield.” This nationalist push is part of Beijing’s broader strategy to rally public morale and present a united front, using historic symbolism to galvanize domestic support during the growing trade confrontation with Washington.

China has placed its civilian officials on “wartime footing,” cancelling vacations and ordering 24/7 readiness in foreign affairs ministries. This shift aims to counter Trump’s tariff blitz with a full-scale diplomatic and economic response. The unprecedented move signals how seriously Beijing is treating the escalating trade tensions with the US.

Reuters

The Chinese Foreign Ministry said the US should solve trade issues through talks instead of using extreme pressure, in response to some products being given tariff exemptions. Regarding the UK’s plans involving British Steel, the ministry said it hopes the UK government will treat Chinese companies fairly and equally when it comes to their investments and business operations.

According to analysts at Jefferies, the Trump administration’s decision to exempt some electronic devices from tariffs shows a big step back from its earlier tough stance, MKTNews reported. Because of this change, Jefferies believes that China might not move forward with a new rule that would place a 125% tariff on the US-made chips that are packaged in other countries.

The analysts also think that Trump may use rules like removing Chinese companies from US stock exchanges and banning American investments in China as tools in trade talks. But if the US and China start negotiations—especially after easing tech tariffs—these risks are less likely to happen. Such talks could also bring more attention from investors to Chinese AI companies.

The Bank of Japan might stop raising interest rates if the yen gets close to 130 against the US dollar, said Akira Otani, a former top economist at the central bank and now a managing director at Goldman Sachs Japan, reported Reuters. He explained in a research note that even though there are still big risks from US tariffs and unstable markets, the Bank of Japan is likely to slowly raise interest rates because Japan’s economy is growing more than expected. However, if the dollar rises above 160 yen, the bank may speed up rate hikes. But if the yen strengthens and gets near 130 per dollar, they might stop raising rates. As of Monday, the dollar was down 0.62%, trading at 142.62 yen.

South Korea’s Prime Minister Han said he is willing to speak directly with US President Donald Trump again if needed, according to Yonhap News. Trump seems to have ordered immediate tariff discussions to begin with South Korea, Japan, and India. Meanwhile, South Korea’s Vice Foreign Minister said that the Trump administration has not officially proposed any talks about sharing defense costs, but the South Korean government is getting ready for all possible outcomes.

China’s new tariffs on US products could help Chinese chip companies that focus on older, more established technology, according to Citi analysts, reported MKTNews. Recently, China’s Semiconductor Industry Association suggested new rules to decide where a semiconductor is really from. According to these rules, even if a chip is made in the US but then packaged in China, it could still be taxed under China’s 125% tariffs. This move could give an advantage to local Chinese chipmakers over big American companies like Texas Instruments. Citi analysts say US companies might try to move their chip production to China or other countries to avoid these extra taxes. Overall, Citi expects more countries to make their own chips locally because of growing political tensions between major economies.

Chinese president Xi Jinping on Monday said that he is looking forward to having an in-depth exchange of views with the Vietnamese leaders on issues that concern bilateral ties, news agency Xinhua reported.

China’s President Xi Jinping began a week of diplomatic meetings in Southeast Asia with a visit to Vietnam on Monday. His trip shows that China is still focused on global trade, even as US President Donald Trump’s latest tariff actions have shaken the world economy, reported AP. Although Trump has paused some tariffs, he is still keeping a 145% tariff on Chinese goods, making China the main target. “There are no winners in a trade war, or a tariff war,” Xi wrote in an editorial jointly published in Vietnamese and Chinese official media.

China’s currency, yuan, dropped against the US dollar on Monday. Last week, it had gone up a bit after hitting its lowest level since 2007. This time, even though the US dollar is weaker, the uncertainty over US tariffs on Chinese goods is making people concerned about the future of the yuan. Since Trump announced new “reciprocal tariffs” on April 2, both the US and China have been adding levies on each other’s goods. These trade tensions between the two biggest economies in the world are now the main reason the yuan is moving up or down, reported Reuters.

After the US government announced that smartphones, computers and other electronics – mostly made in China would be temporarily exempt from tariffs, stock markets across Asia went up as investors felt a sense of relief. Most of these products are made in China before they are shipped to the US. According to Reuters, Foxconn, the main company that makes iPhones for Apple, saw its shares rise about 4%. Quanta, which makes laptops, went up 7%, and Inventec rose 4%.

However, this relief may not last long. President Donald Trump has said that he plans to add tariffs on imported semiconductor chips next week and on smartphones within a month.

Before starting his three-day visit to Southeast Asia on Monday, Chinese President Xi Jinping said that countries in the region should work together more closely. He described China and Vietnam as “friendly socialist neighbours” who share similar beliefs and important common goals, just before arriving in Vietnam.

Xi’s trip to three Southeast Asian countries comes at a time when Trump has started a trade war by putting 145% tariffs on Chinese goods.

Zhiwei Zhang, the chief economist at Pinpoint Asset Management told MKTNews that China’s strong export numbers in March happened because many companies rushed to send goods to the US before new, higher tariffs were put in place. The report said that he thinks China’s exports will slow down in the coming months because of the sharp increase in US tariffs and the uncertainty around future trade rules. Zhang also said that companies will have a hard time adjusting—changing supply chains and deciding where to invest money is difficult and building new factories takes time.

Economists at Capital Economics have said that China’s exports are likely to go down in the coming months because of new US tariffs, MKTNews reported. In March, exports grew quickly because companies rushed to send their goods to the US before the tariffs kicked in on what President Trump calls “Liberation Day.” The economists think it could take years for Chinese exports to return to their current levels. They also say there are signs that some Chinese goods are being sent through other countries—like Vietnam and Thailand—to avoid the direct impact of US tariffs. Exports to these countries rose a lot last month.

China has put some civilian government officials in Beijing on what it calls “wartime footing” and has started a diplomatic campaign to get other countries to speak out against US President Donald Trump’s tariffs, according to four people who know about the situation, reported Reuters. One person said that Communist Party media officials are leading how China presents its response. Government spokespeople have shared bold videos on social media, including clips of former leader Mao Zedong saying, “we will never yield.” According to Reuters, officials in the foreign affairs and commerce ministries have been told to cancel any vacation plans and keep their phones on at all times, as per sources.

Analysts at Daiwa say that US tariffs on Chinese goods might stop at 54% in the end, as both the countries would benefit from a trade deal. After President Trump recently raised tariffs on Chinese products, Daiwa thinks he might soon want to start trade talks with China. They also believe that since the U.S. has already put high tariffs on goods from other countries, it could reduce the overall impact of the China-specific tariffs, MKTNews reported.

Daiwa is still careful about investing in Chinese stocks. They suggest a “barbell strategy,” which means putting money into two different types of sectors: those that pay good dividends and those that benefit from strong demand within China. If the US and China begin trade talks and if China announces new support measures during its upcoming April meeting, Daiwa may feel more positive about the market.

China’s imports of key industrial metals like iron ore and copper dropped in March, showing signs of weaker demand. According to customs data released on Monday, iron ore imports fell by 6.7% compared to the same time last year, while copper imports dropped by 1.4%, reported Reuters. Over the first three months of 2025, the total amount of both metals brought into the country was also lower than last year.

China’s exports grew by 12.4% in March, which was way more than expected. This rise was mainly because companies rushed to send out goods before higher US tariffs took effect,reported MKTNews. On the other hand, imports dropped by 4.3%, showing that people in China are still not spending much. Experts had predicted only a 4.4% increase in exports, so the final number was a surprise. They also expected a smaller drop in imports—just 2%—but the actual fall was worse.

MKTNews said that in January and February, China’s exports only grew by 2.3%, the slowest pace since April 2024. Imports during those two months dropped 8.4%, which was the biggest fall since mid-2023. China’s government has set a growth goal of about 5% for the year. But this is becoming harder to reach because of the trade war with the US and low spending inside the country.

Some major banks, like Goldman Sachs, have lowered their growth predictions for China. Goldman now thinks China will grow by only 4.0% this year, down from its earlier forecast, MKTNews reported. The bank also said that while government action might help a little, it won’t fully make up for the damage caused by US tariffs.

According the MKTNews, the Customs data shows that the trade surplus between China and the United States from January to March was $76.6 billion.

A China Customs spokesperson has said that they will strictly enforce laws and regulations to increase checks and inspections on imported goods. The spokesperson also mentioned that salmonella was detected in poultry meat and bone meal shipped from the United States, reported MKTNews.

Trump on Sunday said that he doesn’t believe a foreign company should own US Steel. He had made similar comments last week, which made it seem less likely that a $14 billion offer from Japan’s Nippon Steel to buy the American company would be approved, reported Reuters. Trump had on Wednesday said that he didn’t want US Steel to “go to Japan,” which caused the company’s stock to drop by 7%. After that, both US Steel and Nippon Steel said they were working with Trump’s team to try and move forward with the deal and secure a major investment. Trump made these comments while speaking to reporters on Air Force One as he flew back to Washington from Florida.

According to MKTNews, the Chinese customs deputy director-general said that in the first quarter of this year, the economy got off to a steady start. Despite challenges, foreign trade continued to grow in both size and quality. He also said that China will strictly follow all legal measures to manage its trade with the United States and will take steps to protect its national sovereignty and security.

Trump also said that there will be some flexibility on semiconductor tariffs for some companies but it’s still no clear. When asked about tariffs on iPhones, he said that they will be announced soon but they got to have some “flexibility”. Speaking on the market, Trump said that US has a financial system that’s “very respected” and so there shouldn’t be “any ambiguity in markets”.

Trump has said that Chinese chips will have to undergo national security probe and that more tariffs can be expected. “These electronics are just moving to a different Tariff ‘bucket,” Trump said in his Truth Social post.

Gold prices jumped last week when the U.S.-China trade situation looked bad. But now that Trump is easing up on some tariffs, markets feel less worried—so gold prices are falling a bit. Reuters reported that spot gold fell by 0.4% to $3,223.67 per ounce early Monday. Just a day before, gold had hit a record high of $3,245.28 per ounce because markets were nervous about US-China trade tensions. US gold futures also dropped a little by 0.1% to $3,240.90.