China cautioned countries against entering into trade agreements with the United States at its expense in order to get exemptions from US President Donald Trump’s tariff regime, which has sparked a global trade war.Beijing’s warning came days before Indian trade negotiators are due to visit the US on April 23 to advance trade deal discussions and coincided with US Vice-President J D Vance starting his four-day visit to India.
China Warns Countries Against Striking Trade Deals With US
Why In News
- China cautioned countries against entering into trade agreements with the United States at its expense in order to get exemptions from US President Donald Trump’s tariff regime, which has sparked a global trade war.Beijing’s warning came days before Indian trade negotiators are due to visit the US on April 23 to advance trade deal discussions and coincided with US Vice-President J D Vance starting his four-day visit to India.
All You Need To Know
- “China firmly opposes any party reaching a deal at the expense of China’s interests. If this happens, China will not accept it and will resolutely take reciprocal countermeasures,” the Chinese Ministry of Commerce said in a statement.
- “Sacrificing others’ interests to obtain so-called exemptions for temporary selfish gains is akin to negotiating with a tiger; it ultimately leads to failure for both parties and harms everyone involved,” it said, adding that China respects countries’ efforts to resolve their trade disputes with the US, but they should also “stand on the side of fairness and justice” and “on the correct side of history”.
Trade War
- China’s warning comes as both the US and China are, amid the trade war, seeking to forge trade deals with nations within their respective spheres of influence. While the US is negotiating agreements with India, Japan and South Korea, China is pushing ahead with deals involving Vietnam, Malaysia and Cambodia.
- US National Economic Council Director Kevin Hassett said earlier this month that the 90-day reciprocal tariff pause has given trade negotiations “more urgency” and that the US currently has as many as 15 trade deals on the table. President Trump has stated that progress has been made in talks with Japan, South Korea and India.
- Ajay Srivastava, former trade officer and head of the think-tank Global Trade Research Initiative (GTRI), said China’s warning of retaliation against countries seen as aligning with US efforts to isolate Beijing must be viewed through the lens of global supply chain realities.
- Most major economies — including the US, EU, Japan, South Korea and India — remain heavily dependent on China for the supply of industrial and consumer goods, he said.
China Statement
- “China is embedded at every level of the global production hierarchy: Tier 1 (finished goods), Tier 2 (intermediate goods), and Tier 3 (parts and components). While the China+1 strategy has enabled some countries to reduce dependence on Chinese finished goods, the global economy still relies heavily on China for critical inputs at the Tier 2 and Tier 3 levels.
- Replacing China entirely requires building manufacturing capabilities from the raw material stage upwards—an effort that no country has yet achieved at scale,” Srivastava said.
- He added that India must chart an independent course — strengthening its domestic manufacturing base and reducing critical import dependencies through targeted investment in deep manufacturing — while remaining firmly committed to WTO-led multilateral trade norms and avoiding actions that could breach global rules.
- During his visit to Vietnam, Chinese President Xi Jinping said in an official statement: “As beneficiaries of economic globalisation, both China and Vietnam should strengthen strategic resolve, jointly oppose unilateral and bullying acts, uphold the global free trade system, and maintain stable global industrial and supply chains.”
- Xi added that both countries are committed to openness and to playing a positive role in ensuring regional industrial and supply chain resilience, as well as in promoting economic globalisation.
- “A single small boat may not survive a ferocious storm; only by working together can we sail steadily and far,” he said. However, the impact of the tariff war between the US and China has begun to show. Earlier this month, US investment bank Goldman Sachs lowered its forecasts for China’s GDP growth to 4 per cent in 2025 and 3.5 per cent in 2026, down from 4.5 per cent and 4.0 per cent respectively, citing the effects of tariffs.
- Meanwhile, Federal Reserve Chair Jerome Powell has said that recent changes in US trade policy are likely to cause “at least a temporary” rise in inflation and “delays in investment decisions”.
- India–US negotiations are progressing, with the Ministry of Commerce and Industry expanding its NAFTA division, which manages India’s bilateral trade relations with the US, Canada and Mexico.
- India and the US are currently negotiating a bilateral trade agreement aimed at more than doubling trade — from the current $191 billion to $500 billion by 2030. The first phase of the deal is expected to be concluded by Autumn this year.
