On April 6, 2025, the People's Daily sent a heavy news: China and the United States have been fighting a trade war for eight years! One sentence triggered a heated discussion among netizens in China. It has been eight years since the United States provoked a trade war with China in 2017. How time flies. In the past eight years, it is obvious to all that this trade war has had a far-reaching impact on China and the United States and even the global economy.
What is a tariff?
Tariff refers to the tax levied by the government of a country or region on imported or exported goods. It can be simply understood as-toll: I opened this mountain and planted this tree. I have to pass by and leave money for the road. In fact, the nature of bandits' toll collection is similar to that of "tariff".
Tariffs are divided into import tax, export tax and transit tax. That is, you have to pay when you come in, mainly for foreign products to enter the domestic market; You have to pay money when you come out, mainly for domestic products to enter foreign markets; You have to pay for crossing the border, but now most countries are free of tolls.
One of the main purposes of tariffs is to increase the fiscal revenue of the country or the region. However, tariffs have other magical functions, such as regulating the trade balance between importing and exporting countries, limiting excessive imports or encouraging exports, and improving the trade deficit; Protect domestic or local industries, raise the prices of imported goods and weaken their competitiveness; Or directly as a means to suppress other countries from political and economic aspects.
What is the US tariff?
American tariff policy can be traced back to the early days of the founding of the United States. In 1789, the Tariff Act signed by George Washington, the first president of the United States, became the basis of American tariff policy. In the early days of the People's Republic of China, Americans were relatively simple and weak. Their tariff policy was to protect their cotton, sugar, tobacco and other industries from shocks in the competition with imperialist countries such as Britain, France and the Netherlands, so as to ensure national security and adjust the balance of international trade.
Obviously, the United States today has forgotten the purpose of tariffs, and only uses the global tariff increase for the latter two purposes-protecting its own local industries and suppressing related industries in trading countries. Running rampant in the global trade market, waving the tariff stick at every turn to make others surrender.
Why is the unilateral tariff policy of the United States playing with fire?
Since Trump's first term of office provoked tariff disputes, the Biden administration has continued relevant policies. In the past eight years, the US trade deficit has not decreased but increased. In 2024, the total US international trade deficit was US$ 918.4 billion, an increase of US$ 133.5 billion compared with 2023, the second highest level since 1960, and an increase of 50% compared with before the "Global Tariff War" in 2017, among which the US merchandise trade deficit with China reached an all-time high of US$ 295.4 billion.
In addition, the trade war has caused the United States to lose more than 200,000 jobs, and the imposition of tariffs has forced American companies to raise product prices and accept lower profits, thereby cutting wages and layoffs, which has adversely affected US economic growth.
Steve Hoffman, CEO and angel investor of Founder Space, a well-known incubator in Silicon Valley, said in an interview with Xinhua News Agency a few days ago that the US-China economic and trade friction provoked by the US has not brought benefits to the US economy and people, but has caused the US economy to suffer.
What is China's wisdom in the trade war?
In the trade war, China has shown the world that as a super large economy, it has strong resilience. Since the United States launched a trade war against China under the pretext of "reducing trade deficit" and "protecting local employment",In the process of actively building diversified markets, China's dependence on the US market has dropped significantly. According to official statistics, from 2018 to 2024, the share of China's exports to the United States dropped from 19.2% to 14.7%. Although the decline in exports to the United States will not have a subversive impact on the overall economy, in contrast, the dependence of many American products on China has further increased. Many consumer goods, investment goods and intermediate products need to be imported from China, and some products are more than 50% dependent, so it is difficult to find alternative sources in the international market in the short term. It will be clear who will benefit from the disconnection of Sino-US trade under the background of deep integration of global production and supply chains. In addition, China is a major trading partner of more than 150 countries and regions around the world. Since 2018, the proportion of exports to ASEAN has increased from 12.8% to 16.4%, and the proportion of exports to countries that have jointly built the Belt and Road Initiative has increased from 38.7% to 47.8%, and it has maintained a rapid growth momentum. There is a vast buffer space in the domestic market. Among the hundreds of thousands of enterprises with export performance in 2024, nearly 85% of them are engaged in domestic sales at the same time, and the domestic sales amount accounts for nearly 75% of the total sales. The country is speeding up the opening of the "export-to-domestic sales" policy, and various policies to expand domestic demand are also expanding, and the accommodating effect of the domestic demand market will become increasingly apparent.
In this process, China has always maintained development and progress, showing the resilience of "getting stronger with increasing pressure". The economic cycle has been continuously improved. In recent years, supply has been continuously optimized and demand has been improved, and the domestic economic cycle has been unblocked, and the endogenous power of the economy has been significantly enhanced.
Since September last year, with the implementation of a series of incremental policies, the domestic economy has continued to pick up. In the first two months of this year, domestic demand such as investment and consumption increased better than expected, exports initially stood the test, and the PMI of manufacturing and service industries continued to pick up, and it is expected to achieve growth of more than 5% in the first quarter. Science and technology empowerment will continue to exert its strength, seize the most important supply of developing new quality productivity, and make many breakthroughs in integrated circuits, artificial intelligence and other fields. "Sticking the neck" and suppressing containment will only force China to accelerate the realization of core technological breakthroughs in key areas. Risk mitigation has achieved remarkable results. In recent years, it has withstood internal and external pressures and continued to resolve risks in key areas such as real estate, local government debt and small and medium-sized financial institutions. At present, the three major risks have been effectively controlled and are in a state of convergence. The real estate market transactions and social confidence have undergone positive changes, and the warming trend in first-tier cities is more obvious. All parties expect continuous improvement.
Since the beginning of this year, views on China's economic prospects at home and abroad have improved significantly. International organizations such as the Organization for Economic Cooperation and Development have raised their forecasts for China's economic growth, optimistic about China's capital market, and regard China's "certainty" as a safe haven to hedge against the US's "uncertainty".
We believe that after eight years of trade war, China has accumulated rich struggle experience. Although the international market generally believes that the United States has imposed excessive tariffs beyond expectations, China has predicted the new round of economic and trade repression by the United States, fully estimated its possible impact, and made sufficient advance and surplus in response to the plan.
Facing the situation that the United States imposes tariffs indiscriminately, China will unswervingly do its own thing well, and adjust its domestic economic structure to cope with the adjustment of the external environment. On the one hand, from the demand side, by promoting residents' income increase and burden reduction, the consumption ability and willingness of residents are improved; On the other hand, from the supply side, we will accelerate the construction of a unified national market, improve the business environment, and support domestic enterprises to provide high-quality products and services around the needs of ordinary people.
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