China poised to strike back if Trump follows through on sweeping tariff plan
Analysts said the response would be swift from China – and others – if the US imposes more tariffs to counter value-added taxes
US President Donald Trump’s pledge to combat value-added taxes (VAT) levied on American exports has put China on the defensive, with retaliation expected as Beijing’s policymakers fret over the disruption such an act could mean for the global economic order.
A White House statement called out value-added taxes as one type of tax that would be reviewed, and the Trump administration is expected to evaluate each country’s VAT scheme in the coming months.
Beijing will reply in kind to any US action it views as a protectionist measure or a bargaining chip, analysts said.
“China has already indicated that they won’t just take it, they will respond,” said Jayant Menon, a senior fellow at the Singapore-based think tank ISEAS-Yusof Ishak Institute.
One possible measure would be scaling back imports of American agricultural goods or aircraft given the alternatives available from other countries, said Chen Zhiwu, chair professor of finance at the University of Hong Kong.