China vows support for economy amid Trump’s trade war tariffs

Beijing pledges to defend multilateralism and boost domestic consumption as US tariffs escalate trade tensions.

An aerial view of stacked cargo containers at a port in Shanghai, China, on April 20, 2025. (c) STR/AFP

By Anna Fadiah and Hayu Andini

China’s top leadership has pledged to reinforce the country's economic foundations and oppose what it described as “unilateral bullying” in global trade—an implicit rebuke of the aggressive tariffs introduced by U.S. President Donald Trump. The announcement, made during a high-level Communist Party meeting chaired by President Xi Jinping, marks a strategic shift as Beijing seeks to counter external shocks and prepare for worsening trade tensions.

The renewed commitment to economic stability and global cooperation comes amid a turbulent climate for the Chinese economy. The country is grappling with a prolonged property crisis, sluggish consumer spending, and now, the resurgence of a trade war with the United States. Friday’s gathering of the Politburo—the top decision-making body of the Chinese Communist Party—centered on ways to safeguard growth in the face of mounting external and internal challenges.

Confronting external pressure with domestic resolve

According to state news agency Xinhua, the Politburo acknowledged “the impact of external shocks is increasing” and emphasized the need to work with the international community to defend multilateral trade principles. Without naming the United States directly, the statement referenced “unilateral bullying practices”—a thinly veiled criticism of Trump’s tariff-heavy policies.

Since reclaiming the presidency in January, Trump has imposed sweeping new tariffs on Chinese goods, with some products facing levies as high as 145 percent. China, in retaliation, introduced 125 percent tariffs on a range of American imports. The tit-for-tat exchange has added renewed volatility to global markets and reignited fears of a prolonged economic standoff between the world’s two largest economies.

Despite the turbulence, Chinese officials are opting for a measured response rather than aggressive stimulus. Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management, noted in a research note that Beijing appears cautious in its approach, possibly waiting to gauge the full impact of the external trade shock before rolling out substantial economic interventions.

Strengthening domestic drivers of growth

A key focus of the Politburo meeting was boosting domestic consumption—a crucial element in China’s long-term strategy to reduce dependence on exports. The leadership emphasized the importance of increasing incomes and promoting service-sector consumption to drive internal demand.

Xinhua reported that the government plans to implement “key rate cuts at appropriate times” and hinted at a willingness to adjust policy based on shifting global dynamics. Yet, no large-scale stimulus package was announced, underscoring the leadership’s hesitancy to overextend public spending amid economic uncertainty.

This domestic pivot also signals a broader transformation in China's economic model. Experts have long pointed out the need for China to rely more heavily on its massive internal market, especially as global trade becomes more fragmented and politically contentious.

Yue Su, Principal Economist at the Economist Intelligence Unit, told AFP that the meeting’s tone reflects Beijing’s growing awareness of “downside risks,” suggesting a more realistic outlook from the government. Su also highlighted the Politburo’s emphasis on innovation, which she sees as preparation for a “deepening decoupling with the United States.”

Mixed signals on trade negotiations

While tensions continue to escalate, there remains confusion over the status of trade talks between Washington and Beijing. On Thursday, China’s commerce ministry flatly denied any ongoing negotiations. However, just hours later, President Trump insisted that discussions were taking place. “We've been meeting with China,” Trump told reporters, fueling speculation about backchannel communications.

Further complicating the picture, Chinese financial outlet Caijing reported that Beijing may exempt certain U.S. semiconductor products from recent tariff increases. The report, citing sources familiar with the matter, suggested that Chinese officials are considering tactical adjustments to their trade response. The commerce ministry did not immediately respond to requests for confirmation.

Analysts view these developments as part of a broader effort by China to maintain flexibility in an increasingly unstable economic environment. By adopting what officials have described as “extreme scenario thinking,” Beijing appears to be preparing for the possibility of a full-scale decoupling from the U.S. economy.

The outlook: realism and resilience

While China is targeting an annual growth rate of five percent in 2025, most economists believe that achieving this goal will be difficult given the scale of current economic challenges. In addition to the pressures of the U.S. trade war, China faces persistent issues in its housing market, rising youth unemployment, and sluggish consumer confidence.

Still, the Politburo’s latest meeting suggests that China is determined to forge a path forward through pragmatic policy adjustments and diplomatic resilience. By reaffirming its commitment to multilateralism, domestic consumption, and innovation, Beijing aims to weather the storm without succumbing to the kind of economic panic that could further destabilize global markets.

The coming months will be critical. Whether China’s strategic patience pays off—or whether the deepening conflict with the U.S. escalates into broader economic disruption—remains uncertain. But what is clear is that China’s top leaders are preparing for every scenario, however extreme.

As the global trading system continues to fragment under the weight of nationalist policies and retaliatory tariffs, China’s dual approach—resisting external pressure while strengthening internal resilience—could define the next chapter in the shifting balance of global economic power.