China pauses on instant counterstrikes to fresh U.S. tariffs

China avoided an immediate response to the new U.S. tariffs by not repeating its swift reactions from February and March when Trump increased duties and Beijing replied instantly. China maintained complete silence regarding retaliation for five hours after Trump implemented his “reciprocal” tariffs which raised rates to 104% on Wednesday. The Chinese government released its 28,000-character white paper about U.S. trade at 3 p.m. local time while emphasizing both its “earnest” Phase One deal execution and “mutually beneficial” relationships.

The Ministry of Commerce Q&A released with the paper presented a dual message which maintained an open position for talks while demonstrating readiness to fight until the end and threatening retaliatory measures against the U.S. The ongoing tariff conflict between Trump and Xi has continued without any direct communication between the leaders since Trump resumed office in January. The Chinese government responded to Trump's initial 34% tariff increase with a corresponding levy but the president's subsequent 50% increase escalated the situation.

The temporary halt provided markets with some relief following their severe decline. The Chinese stock gauge of Hong Kong experienced a 1.4% increase following its previous 4%+ decline while the CSI 300 increased by 1%. The Chinese government might continue using its previous response from last week which was released one day after the holiday Friday at 6 p.m. The Xi administration has not ruled out launching a counterattack during U.S. market hours or at the start of the following week. According to Reuters sources the top economic officials will meet on Wednesday to develop economic defense strategies including consumption programs and market stabilization measures against Trump's tariffs. The Chinese government continues to expand its retaliation strategies which now include multiple measures beyond tariffs.