The Trump administration has asserted that numerous countries are eager to renegotiate trade agreements to circumvent these new US penalties, which would significantly impact their exports to the world's largest economy.
It's important to note that these new tariffs are currently on hold for all nations except China, which faces US levies as high as 145%. In response, Beijing has retaliated by increasing tariffs on US imports to 125%.
What did China say?
In statement released on Monday by its Commerce Ministry, China firmly asserted that "appeasement will not bring peace and compromise will not be respected." The ministry cautioned other countries against prioritizing "temporary selfish interests at the expense of others," arguing that such actions would ultimately be detrimental to all parties involved and would "ultimately fail on both ends and harm others."
"China firmly opposes any party reaching a deal [with the US] at the expense of China's interests," the statement emphasized. The ministry further declared that Beijing would "resolutely take reciprocal countermeasures" against any nation that acts in this manner.
Which countries are negotiating with the US?
Earlier this month, US Trade Representative Jamieson Greer indicated that nearly 50 countries have approached the US seeking to avoid the new tariffs, which Trump claims are necessary to address significant trade imbalances between the US and the rest of the world.
Since then, several bilateral discussions have taken place. Notably:
- Japan is reportedly considering increasing imports of US soybeans and rice as part of a potential agreement with Washington.
- South Korea has outlined a plan that includes increased purchases of US liquified natural gas (LNG), along with potential joint ventures in shipbuilding and pipelines.
- Taiwan’s president, Lai Ching-te, has offered zero tariffs as a basis for negotiations, and Taiwanese companies are reportedly planning increased US investments to sweeten any potential deal.
- Indonesia has stated its intention to increase imports of US food and commodities while reducing orders from other nations.
- India is currently engaged in trade deal discussions with the US, as evidenced by US Vice President JD Vance's ongoing four-day official visit to the country.
- The European Union has paused retaliatory tariffs on $23 billion worth of US imports to allow for continued negotiations.
Trump: China, US also in talks
Despite the increasingly confrontational rhetoric emanating from Beijing, President Trump last week stated that discussions with China regarding tariffs are also underway. "Yeah, we’re talking to China," Trump told reporters in the Oval Office. "I think we’re going to make a very good deal with China." However, Beijing has yet to confirm these talks and has consistently vowed to fight the trade war "to the end."
How will countries balance China, US ties?
If the new US tariffs remain in effect, they could create opportunities for China's competitors, particularly in Southeast Asia, to increase manufacturing specifically for the US market. Many of these countries have already benefited from manufacturers diversifying their supply chains away from China in recent years due to escalating US-China trade tensions.
Furthermore, by forging new energy deals with the US, Asian neighbors could potentially put pressure on China, the world’s largest LNG importer, forcing it to rely on more expensive and less reliable energy sources.
However, these countries face a delicate balancing act. Over the past two decades, most nations have become heavily reliant on trade with China and are actively seeking further economic opportunities with the Asian giant. In 2024, ASEAN, the Southeast Asian regional bloc, conducted more than twice as much trade with China ($975 billion) compared to its trade with the US ($398 billion).
“The fact is, nobody wants to pick a side,” commented Bo Zhengyuan, a partner at China-based policy consultancy Plenum. “If countries have high reliance on China in terms of investment, industrial infrastructure, technology know-how and consumption, I don’t think they’ll be buying into US demands.” This highlights the complex geopolitical and economic considerations that nations must weigh as they navigate the escalating trade tensions between the world's two largest economies.