China warns the US against reimposing August tariffs

China has warned the United States not to reimpose tariffs on Chinese items in the coming month and has threatened to punish any country that makes trade deals with Washington aimed at cutting Beijing out of global supply chains.

In June, the two sides arranged a trade pact resulting in a truce. However, this truce remained somewhat fragile. Many trade issues are still unresolved due to which investors and traders in both nations are keeping a close eye to see whether the trade arrangement will hold or quickly fall apart.

On Monday, July 7, Trump started informing his trade partners that new U.S. import duties will kick in on 1st August, after postponing nearly all of his levies from April, which he held at just a 10% rate for most nations, to give countries more time to negotiate with the world’s largest economy.

Among the countries hit hardest is China, where some goods faced levies above 100%. Beijing now has time until 12th August, 2025, to reach a deal with America. If it does not, the United States plans to bring back other curbs that were introduced during the back-and-forth hikes this past spring.

China’s ruling party stresses the need for talks

In a commentary published on Tuesday, the People’s Daily, the official newspaper of China’s ruling party, stressed the need for talks. “One conclusion is abundantly clear: dialogue and cooperation are the only correct path,” the piece commented regarding the latest round of trade friction between the two nations.

The article carried the byline “Zhong Sheng,” meaning “Voice of China,” a name used by the paper for its foreign policy commentary.

The newspaper also repeated Beijing’s view that the American duties are akin to “bullying.” It added, “Practice has proven that only by firmly upholding principled positions can one truly safeguard one’s legitimate rights and interests.”

Those remarks signal that China could respond strongly if the United States follows through on what the paper called “a so-called ‘final deadline.’” Observers say this could lead to another round of tariff increases on both sides.

According to data from the Peterson Institute for International Economics, the average US tariff on exports from China is currently around 51.1%. In return, China’s average duty on American products stands at 32.6%. Both countries are covering the full range of their bilateral trade, across all categories of goods.

The People’s Daily also took aim at smaller Asian economies that have sought their own tariff deals with Washington, potentially cutting out China from regional supply chains and markets.

Vietnam also agreed to cut its U.S. import rate to 20%, down from 46%, under a deal that applies a 40% levy to “transshipped”  goods via its ports but originally made in China last week.

The editorial warned that China is against forming a trade agreement that harms the interests of China in return of concessions in tariffs. Under this situation, China won’t accept a trade deal and will continue to protect Chinese interests, the editorial further added.

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