Ministry declares firm opposition to US trade pressure

Trade is about mutual benefit, not about unilateral bullying.

Responding to reports that the US is preparing to pressure other countries to restrict trade ties with China in exchange for tariff exemptions, a spokesperson for the Ministry of Commerce said on Monday that China firmly opposes any deal between the US and its trading partners at the expense of Chinese interests.

Xinhua news agency quoted the spokesperson as saying: "This is essentially using the banner of 'reciprocity' as a pretext to pursue hegemonic politics and unilateral bullying in the field of international economy and trade."

The spokesperson said China respects all parties seeking to resolve their trade disputes with the US through equal consultation, calling on all parties to stand on the side of fairness and justice.

"Once international trade reverts to the law of the jungle, where the strong prey on the weak, all countries will suffer," the spokesperson added.

Indeed, trade is inclusive. In trade there's no place for a predator.

The spokesperson's statement reminds me of an article posted on April 18 on the official website of the United Nations Industrial Development Organization (UNIDO), titled "Developing countries need fair market access and partnership to secure jobs."

The article noted that 450 million people work in global supply chains and that a rise in protectionism in advanced countries will slow down industrialization efforts and impede poverty reduction by limiting job creation and economic opportunities.

"The negative effects of increasing tariffs will affect not only already vulnerable countries but also the very countries implementing tariffs, exacerbating geopolitical tensions and uncertainty," said the article.

The article further pointed out that these measures take the wrong approach – particularly as their calculation and implementation are not grounded in evidence to achieve the intended outcome.

"By driving up the cost of industrial production, these tariffs undermine economic efficiency, diminish the benefits of trade, and weaken competitiveness, ultimately putting jobs at risk worldwide, thereby affecting the most vulnerable countries the hardest ...," the article noted.

"Rather than erecting barriers to industrial trade, a fairer and sustainable global economy should be the goal," UNIDO Director General Gerd Müller was quoted as saying. "The USA's withdrawal from development and economic cooperation and shared responsibility has set a dangerous chain in motion, with other industrialized countries reducing their commitments."

A changing global trade landscape

Before UNIDO posted the article on its website, the World Trade Organization published the latest Global Trade Outlook and Statistics report on April 16, warning that the outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty.

Here is a quote from the executive summary of the WTO report: "Based on measures in place as of 14 April, including the suspension of 'reciprocal tariffs' by the United States, the volume of world merchandise trade is now expected to decline by 0.2% in 2025 before posting a modest recovery of 2.5% in 2026. The new estimate for 2025 is nearly three percentage points lower than it would have been without recent policy shifts, and marks a significant reversal from the start of the year, when WTO economists expected to see continued trade expansion supported by improving macroeconomic conditions."

Having painted a less rosy picture about global trade in 2025 than initially expected, the WTO report noted that trade policy uncertainty, volatility and restrictiveness will have a two-fold impact on global trade. First, uncertainty acts as a direct trade cost. Second, widespread uncertainty can potentially have negative spillovers on global growth by affecting households' consumption and savings behavior.

"Ultimately, a general environment of trade restrictiveness and volatility of market access conditions can have negative effects on aggregate demand and trade," the report said.

Moreover, the report noted, most economists expect tariffs to have limited effects on aggregate trade imbalances. In other words, tariff increases or threats to heft tariffs do little to address a country's aggregate trade imbalances.

Here is why.

"Macroeconomic fundamentals – such as fiscal policy or the household savings rate – play a more dominant role. This view is supported by empirical studies that have found little impact of tariffs on aggregate trade balances so far," the report explained.

Restricting trade is not the way out. WTO chief economist Ralph Ossa wrote in an WTO blog last Wednesday: "Open, predictable and cooperative trade policies remain essential – not just for trade itself, but for global economic resilience."