I. Impact on China's Foreign Trade

(A) Short-term Impact

1. Soaring Export Costs and Business Survival PressureThe US is China's third-largest trading partner, with exports to the US accounting for 14.6% of China's total exports in 2024 (Source: International Business Daily). After the tariffs are imposed, industries highly dependent on the US, such as electronics, machinery, and textiles (e.g., over 25% of US imports in the computer electronics sector are from China), will face surging costs.    For example, if Apple passes the tariff costs onto consumers, prices could rise by 40% (Source: Global Times), leading to lost orders or squeezed profits.  Some small and medium-sized enterprises (SMEs) might exit the market due to unbearable cost pressure, especially low-value-added businesses reliant on contract manufacturing, which face significant risks.   

   
   

2. Supply Chain Restructuring and Global Industrial Chain Decoupling    US demands for "friend-shoring" and "near-shoring" may accelerate the relocation of supply chains from China to places like Vietnam and Mexico.  However, countries like Vietnam still rely heavily on Chinese intermediate goods (e.g., the correlation between Vietnam's exports to the US and its imports from China is 80%) (Source: China.org.cn), making it difficult to completely replace China's production capacity in the short term.  Nevertheless, in the long run, this could weaken China's core position in the global supply chain, especially in sectors like semiconductors and high-end equipment.   

   
   

3. Trade Deficit and Balance of Payments PressureUS tariffs might lead to a decrease in China's exports to the US, but China's imports from the US will also contract due to higher tariffs (e.g., the cost of importing cars surged by 124%) (Source: China Daily Net), so the trade deficit may not necessarily widen significantly. However, a global trade slowdown could put depreciation pressure on the Renminbi (RMB). While this might temporarily boost export competitiveness, it could exacerbate the risk of capital outflows.

(B) Long-term Opportunities

1. Forcing Industrial Upgrading and Domestic Demand Expansion    Tariff pressure will accelerate the transformation of Chinese enterprises towards high-value-added sectors.  For instance, in 2024, China's high-tech product exports grew by 4.8%, and integrated circuit exports reached a historical high (Source: General Administration of Customs of the PRC), indicating progress in industrial upgrading.  Simultaneously, export challenges may prompt businesses to turn to the domestic market. In 2024, China's cross-border e-commerce import and export value increased by 10.8% (Source: General Administration of Customs of the PRC), gradually unleashing the potential of the domestic market.   

   
   

2. Trade Diversification and Deepening Regional Cooperation    China has already reduced its dependence on the US through platforms like RCEP (Regional Comprehensive Economic Partnership) and the "Belt and Road" initiative.  In 2024, trade with ASEAN reached 4.5 trillion yuan, an increase of 10% (Source: International Business Daily).  Exports to emerging markets (like Africa and Latin America) have become new growth points. Countermeasures such as rare earth export controls and the Unreliable Entity List have also strengthened China's bargaining power in key resources and technologies.   

   
   

3. Enhanced Influence in Global Rule-Making    The US's unilateral tariff policy has drawn international opposition, with allies like the EU and Canada initiating countermeasures.  By upholding the multilateral trading system, China may attract more countries for cooperation. For example, tariff reductions and cumulative rules of origin among RCEP member states (Source: China FTA Service Network) help China play a leading role in regional economic cooperation.   

   
   

II. Analysis of Pros and Cons

(A) Pros

• Accelerated industrial upgrading: Elimination of low-end capacity, enhanced competitiveness in high-end manufacturing (e.g., AI, new energy).
• Activated domestic market: Shift from exports to domestic sales drives consumption upgrades; rise of new formats like cross-border e-commerce and the digital economy.   
• Enhanced supply chain resilience: Diversifying market risks through the "Belt and Road" and regional cooperation.
• Reshaping international rules: Weakening US hegemony, increasing China's influence within frameworks like the WTO and RCEP.

(B) Cons

• Short-term economic pain: Layoffs and bankruptcies in export enterprises; youth unemployment could rise by 0.4 percentage points.
• Risk of technological decoupling: Increased US restrictions on semiconductors, AI, etc., intensifying pressure for technological self-reliance.
• Global economic volatility: Trade contraction could trigger global stagflation, hindering the recovery of China's external demand.   
• Pressure on exchange rates and capital flows: RMB depreciation could stimulate inflation, increasing the risk of capital outflow.

III. Likelihood and Sustainability of the Policy

(A) Policy Implemented, but Long-term Doubts Exist

1. US Domestic Resistance:

   • Economic Costs: The US stock market plunge led to nearly 50 trillion RMB in evaporated market value (Source: Sina Finance), annual household spending increased by $5,000 (Source: Jingbao Wang), and unprecedented consumer protests involved over a million people in 1400 demonstrations.
   • Corporate Pushback: Multinational corporations like Apple and Tesla faced stock plunges due to tariff costs and supply chain disruptions, increasing lobbying pressure.
   • Political Fallout: Trump's "reciprocal tariff" policy provoked opposition from allies (like the EU and Canada), potentially increasing his domestic political isolation.

2. China's Countermeasures and International Pressure:

   • China imposed 34% retaliatory tariffs on US goods and restricted rare earth exports (Source: China Daily Chinese Network), directly impacting US agriculture and high-tech industries (e.g., 80% reliance on China for lithium batteries) (Source: China.org.cn).  Damage to the global trading system could weaken US dollar hegemony, forcing the US to weigh its long-term interests.   

(B) Possible Adjustments

1. Partial Exemptions or Negotiated Compromises: The US might exempt goods like pharmaceuticals or critical components from tariffs, or reduce rates through negotiations.   
2. Phased Implementation: Implementing tariffs on some goods first, then expanding based on observed effects.
3. Domestic Subsidies: The US might provide subsidies to affected businesses to cushion the tariff impact.

(C) Policy Sustainability Assessment

• Short-term: The policy is in effect, and US-China friction might intensify, but both sides have room for negotiation.
• Mid-term: If the risk of a US economic recession increases, Trump might adjust the policy to seek re-election.
• Long-term: The trend of global supply chain "decoupling" is difficult to reverse, but complementarity between the US and China in basic goods trade still exists.

Conclusion:

Trump's tariff policy presents both "crisis and opportunity" for China's foreign trade: short-term impacts are unavoidable, but long-term, it will accelerate China's industrial upgrading and trade diversification. The policy's realization likelihood depends on the intensity of US-China confrontation, US domestic political pressure, and the international community's reaction. China needs to respond with the following strategies:

1. Accelerate Technological Self-Reliance: Increase R&D investment in fields like semiconductors and AI to reduce dependence on US technology.
2. Deepen Regional Cooperation: Utilize RCEP and the "Belt and Road" to expand into emerging markets and reduce the proportion of exports to the US.   
3. Expand Domestic Demand: Counteract declining external demand through consumption stimulus policies and new infrastructure investment.   

4. Strengthen International Coordination: Unite with the EU, ASEAN, etc., to resist unilateralism and uphold the multilateral trading system.
   

   
   

Overall, China has demonstrated strong resilience, but if the US maintains high tariffs long-term, the global economic landscape will face profound restructuring.