Op-ed: No winners in tariff war

The following is an op-ed written by He Fen, the Charge d'Affaires at the Chinese Embassy in the Maldives.

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Recently, the U.S. government announced the imposition of "reciprocal tariffs" on all trading partners. This move disregards the balanced interests achieved through years of multilateral trade negotiations and ignores the enormous benefits the U.S. has long reaped from globalization. It is a typical example of unilateral bullying practices and has sparked strong dissatisfaction and explicit opposition from many trading partners. China firmly opposes the U.S. actions and has implemented resolute countermeasures, including imposing additional tariffs on all U.S.-origin imports, adding 16 U.S. entities to the Export Control List, and placing 11 U.S. companies on the Unreliable Entity List. These integrated measures forcefully respond to U.S. tariff provocations and demonstrate China’s unwavering resolve to safeguard national interests.

"Reciprocal tariffs" bring all harm and no benefit, with the U.S. itself bearing the brunt.

On the day the policy was announced, the three major U.S. stock indices plummeted, marking their largest single-day drop in nearly five years. The combined market capitalization of tech "magnificent seven" including Apple and Tesla evaporated by over $700 billion. While it remains uncertain whether the U.S. will gain from "reciprocal tariffs," its capital markets have already borne the initial pressure, becoming the primary victim. Experts warn that tariff costs will ultimately fall on U.S. consumers, directly eroding household incomes and weakening consumption confidence. Simultaneously, rising manufacturing costs and supply chain disruptions will severely undermine the foundation of U.S. manufacturing. Gabriel Felbermayr, Director of the Kiel Institute for the World Economy in Germany, stated that protectionism acts like a boomerang—the harder it is thrown, the more painfully it strikes back. The U.S. may become the economy most impacted by its own tariff policies. Goldman Sachs estimates the probability of a U.S. economic recession within the next year has surged to 35%.

"Reciprocal tariffs" destabilize the global economic system.

Studies indicate that every 10% increase in U.S. tariffs could reduce global economic output by 0.3%. Should U.S. tariffs on China reach 60%, global electronics and textile supply chains would face forced restructuring, with world GDP contracting by 2% and trade volumes declining by 6% within five years. Economists widely warn that U.S. policies undermine the multilateral trading system and global value chains, exacerbating global economic uncertainty and potentially triggering a new recession. More alarmingly, the U.S. persistently politicizes and weaponizes economic issues, coercing countries into political and diplomatic concessions through sanctions and export controls, thereby intensifying conflicts, creating divisions, and heightening global economic risks. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), cautioned that such measures pose significant risks to global prospects amid already sluggish economic growth.

China remains steadfast in upholding the multilateral trade order and continues to inject stabilizing forces into the global economy.

Against the backdrop of weak global economic recovery, heightened geopolitical tensions, and rising protectionism and unilateralism, China advocates for genuine multilateralism, safeguards economic globalization and free trade, and enhances global stability and certainty. China has become the primary trading partner for over 150 countries and regions, maintaining its position as the world’s second-largest recipient of foreign investment. All foreign investment restrictions in the manufacturing sector have been eliminated, with 100% zero-tariff treatment granted to products from the least developed countries that have diplomatic ties with China. As the world’s second-largest economy and second-largest consumer market, China’s door to openness will only widen further, regardless of international turbulence. China will continue to advance high-standard opening-up, steadily expand institutional openness in rules, regulations, management, and standards, implement high-level trade and investment liberalization and facilitation policies, create a first-class market-oriented, law-based, and internationalized business environment, and share development opportunities with the world to achieve mutual benefit and win-win outcomes.

The world must embrace equity, not hegemony. China stands ready to work with all countries, including the Maldives, to resolutely defend international equity and justice, uphold the multilateral trading system, safeguard the stability of global industrial and supply chains, and jointly steer the world economy toward inclusive, stable, and sustainable development.