That ended on Tuesday, as the president revealed he was considering a new 10% tariff on Chinese imports that could come into effect as early as Feb 1. Trump accused China of sending fentanyl to Mexico and Canada, necessitating tariffs. 

On Monday, Trump proposed new 25% tariffs on Mexico and Canada.

All three measures were mentioned in a November post on Trump’s Truth Social account. He’d floated even higher tariffs on China, as high as 60%, during the presidential campaign. 

Beijing said on Wednesday that it’s “firmly committed to safeguarding national interests” following Trump’s tariff comment. China’s Foreign Ministry spokesperson Mao Ning also added that “there are no winners in a trade or a tariff war,” a line Beijing often repeats.

Chinese markets dipped on Tuesday. The Hang Seng Index closed down around 1.8% and the CSI 300 was down by 0.9% at close. Markets in Tokyo, Seoul, and Taipei rose.

On his first day in office, Trump also floated the idea of a 100% tariff on China in the event a TikTok deal couldn’t be reached. 

In addition, Trump ordered agencies like the Office of the U.S. Trade Representative to review trade relations between the U.S. and China. 

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In 2020, during his first term, Trump signed a “Phase One” deal with Beijing that cut some tariffs in exchange for Beijing increasing its purchases of U.S. goods and services by $200 billion over a two-year period. Beijing did not meet that target as the COVID pandemic hit. 

Worsening trade tensions with Beijing have encouraged companies to diversify their supply chains away from China, moving investment to countries like Vietnam and India. Yet manufacturers have struggled to ditch China entirely; supply-chain experts note that no other country yet matches China’s ability to manufacture intricate products at scale and at low cost. 

Higher tariffs may also hurt U.S. companies that still rely on cheap imports from China, like massive retailers Walmart and Costco. Both companies have warned that broad tariffs could raise prices for U.S. consumers. 

And while Chinese companies are shifting focus to markets in Southeast Asia and Latin America, as the U.S. market begins to be closed off, experts noted Chinese manufacturers may struggle to find a replacement market for the U.S. and its high-spending consumers. 

Update, Jan. 22, 2025: This piece has been updated with a comment from China’s foreign ministry spokesperson Mao Ning.