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The article presents DeepSeek’s analysis of the potential impact of Trump’s reciprocal tariffs on China and outlines possible countermeasures China could take. DeepSeek, described as China's biggest AI disruptor, provides a relatively neutral perspective, emphasizing China's commitment to a mutually beneficial trade strategy. It highlights the Chinese government's capability to navigate international trade challenges while safeguarding national interests and promoting economic stability. The article underscores China's dedication to deepening reforms, expanding openness, and collaborating with other nations to build a shared future for mankind, asserting that no external factors can impede China's progress and the improvement of its people's lives. The response from DeepSeek frames China as resilient and strategically adaptable, capable of withstanding external pressures and continuing its development trajectory despite the imposition of tariffs by the United States. China's commitment to multilateralism is emphasized, along with its desire to foster an open global economy. This framing positions China as a responsible global actor, navigating trade tensions while maintaining a focus on collaboration and shared prosperity. China’s leaders believe that they have been able to guide the country into global trade dominance and are willing to be patient when dealing with external trade challenges.
When questioned about retaliatory actions China could take against Trump's tariffs, DeepSeek outlined seven key strategies. The first involves imposing targeted tariffs on key U.S. exports such as agricultural products (soybeans, pork), aircraft, automobiles, and energy products. This strategy aims to pressure politically sensitive U.S. industries and influence domestic sentiment in key electoral states. The second strategy focuses on export controls on critical materials, particularly rare earth metals, where China dominates global supply chains. Restrictions on rare earth exports could disrupt U.S. manufacturing, mirroring actions taken in past trade disputes. The third approach involves implementing non-tariff barriers and regulatory measures, such as stricter inspections on U.S. imports, anti-dumping and anti-subsidy investigations against U.S. products, and preferential treatment for non-U.S. companies in government procurement. The fourth strategy involves diversifying trade partners and reducing dependence on the U.S. by strengthening trade with the EU, ASEAN, Africa, and Latin America through new agreements, and accelerating the Regional Comprehensive Economic Partnership (RCEP) to deepen Asia-Pacific trade ties. The fifth strategy considers currency and financial measures, such as allowing the yuan to depreciate to make Chinese exports more competitive and potentially dumping U.S. Treasury bonds, although this is recognized as a double-edged sword.
The sixth strategy involves legal and WTO challenges, including filing complaints at the WTO against U.S. tariffs and forming alliances with other affected countries to jointly oppose U.S. protectionism. The seventh and final strategy centers on domestic stimulus and self-reliance, including boosting domestic consumption to offset export losses and accelerating tech independence, particularly in semiconductors, through policies like “Made in China 2025.” The article concludes that China has a strategic, multi-layered approach to counter U.S. tariffs, combining retaliatory measures with long-term economic resilience strategies. The ultimate goal is not just short-term retaliation but also reducing dependency on the U.S. market while simultaneously strengthening global alliances. The recent tariff announcements by former US President Donald Trump, imposing a 54% rate on Chinese imports, have reignited concerns about a potential trade war, particularly impacting technology supply chains. The Trump administration defends the tariffs as a means to protect American industries and correct trade imbalances, while critics fear rising consumer prices and global economic instability. The article also mentions China's ban on the export of key minerals to the US, including gallium and germanium, which are essential components in various technologies, including semiconductors, infrared technology, fiber optic cables, solar cells, and military applications. This ban highlights China's leverage in critical materials and its willingness to use it as a strategic tool in trade disputes. China is also currently working to bolster relationships with countries in Asia, Africa and Latin America to further their export capabilities. China is working to diversify the production of goods and services that they produce so that they may be less reliant on particular goods for export. This approach will allow the company to remain resilient during times of trade uncertainty. China will need to continue to work and foster relationships with other countries in order to allow them to have the strength in business that they currently poses. All of these strategies put together are important to ensure China continues to be a player in global trade. There will be many external forces to trade with China including Trump and his potential policies.
Source: Are Trump's reciprocal tariffs bad for China? DeepSeek says...