China has played down the risk of damage to its exports from Donald Trump’s tariffs, with an official saying the “sky won’t fall,” as stock markets rose on Monday amid signs of a retreat on electronics restrictions.
The world’s second-largest economy has diversified its trade away from the US in recent years, according to Lyu Daliang, a customs administration spokesperson, in comments reported by state-owned agency Xinhua.
China has retaliated forcefully to Washington’s tariffs, with 125% levies on US imports against the US’s total of 145% border taxes on goods moving the other way. The trade war has prompted turmoil on financial markets since Trump first revealed tariffs on every country in the world on 2 April. Since then he has partly retreated on the highest levies on most trading partners for at least 90 days but has doubled down in his spat with China.
The White House offered further relief over the weekend with an exemption from the steepest tariffs for electronics, including smartphones, laptops, and semiconductors. Trump officials later appeared to walk that back with the commerce secretary, Howard Lutnick, saying such devices would be “included in the semiconductor tariffs, which are coming in probably a month or two.”
Trump said on Sunday night on his social network, Truth Social, that “NOBODY is getting ‘off the hook’,” highlighting that smartphones are still subject to 20% levies and suggesting they could still rise higher.
However, investors on Monday appeared unconvinced by Trump’s attempts to play down the retreat. Japan’s Nikkei gained 1.2%, while Hong Kong’s Hang Seng rose by 2.2%, and the Shanghai and Shenzhen exchanges climbed by 0.8% and 1.2%, respectively. European stock market indices also jumped in opening trades, with London’s FTSE 100 up by 1.6%, Germany’s DAX up 2.2%, and France’s CAC 40 up 2%.
“The sky won’t fall” for Chinese exports,” China’s Lyu said. “These efforts have not only supported our partners’ development but also enhanced our own resilience.”
The customs report also played up China’s “vast domestic market” and said, “The country will turn domestic certainty into a buffer against global volatility.” China has increasingly tried to stimulate private consumption.
China’s president, Xi Jinping, on Monday criticized the US tariffs during a visit to Vietnam. Vietnam has in recent decades grown to become the eighth largest source of goods for US consumers, but it is facing the threat of 46% tariffs when Trump’s 90-day pause expires.
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