As trade war threats rain down, Premier Li says China must ‘turn pressure into motivation’

With the United States slapping an additional 10 per cent tariff on all Chinese goods this week, Beijing is looking to anchor market confidence as worries intensify over the potential fallout from a ramped-up trade war.

The Chinese government’s return fire featured a slew of retaliatory measures, including 10-15 per cent tariffs on some American goods – a move backed by China’s growing reliance on its domestic market, rapid tech progress embodied by the release of DeepSeek’s artificial intelligence (AI) model, and the nation’s strong manufacturing capability.

“We must strengthen confidence, work together and view external changes objectively,” Premier Li Qiang said during a plenary meeting of the State Council on Wednesday – the first working day in the Year of the Snake.

“Coordinated measures are needed to address domestic economic problems and respond to external challenges,” said Li, China’s No 2 political figure and a major caretaker of the national economy.

“We must turn pressure into motivation [to move forward].”

Li’s remarks came while discussing a draft of his government work report, which is due to be reviewed by China’s parliament next month.

The premier is expected to release this year’s economic targets, including GDP growth, inflation, fiscal deficit ratio and bond issuance, during the annual parliamentary session. And the market has been largely expecting an “around 5 per cent” growth target, unchanged from last year.

At Wednesday’s meeting, Li pledged “norm-breaking” measures and “easy-to-feel” policies, while striving for progress in cultivating a massive domestic market while boosting technological innovations and industrial upgrades.

Policies should interact more effectively with the market; offer improved conditions for enterprise innovation and development; and aim to “create more opportunities for all talent”, he added.