Trade war countdown begins: China warns Trump over tariffs, vows payback for supply chain shifts

China on Tuesday warned the Trump administration against reigniting trade tensions by reimposing steep tariffs on Chinese goods next month, signaling it may retaliate against any country that aligns with Washington to cut Beijing out of global supply chains.The warning comes as part of an official commentary published in the ruling Communist Party’s mouthpiece, People’s Daily, under the pseudonym “Zhong Sheng,” meaning “Voice of China.” According to a Reuters report, the article criticized the US tariff strategy, labeling it “bullying,” and argued that “dialogue and cooperation are the only correct path.”

“Practice has proven that only by firmly upholding principled positions can one truly safeguard one’s legitimate rights and interests,” the piece asserted, setting the tone for a possible re-escalation in trade hostilities, Reuters reported.Trump sets new tariff deadline for August 1The renewed threat of tariffs follows President Donald Trump’s move on Monday to notify several trade partners about sharply higher duties taking effect August 1. The White House had previously delayed most of its April tariffs to give countries time to strike separate deals.China, initially hit with tariffs exceeding 100%, has until August 12 to reach an agreement with the US or risk a reimposition of duties that were introduced during tit-for-tat exchanges earlier this year.While the two sides agreed in June to a basic trade framework that paused further escalation, key details remain unresolved, leaving investors and traders wary about whether a sustainable agreement can be reached.Tariff war impact: Trade fully covered, rates sky-highAccording to the Peterson Institute for International Economics, current average US tariffs on Chinese exports stand at 51.1%, while China’s duties on US goods average 32.6%. Both countries now effectively have tariffs on all traded goods between them.The People’s Daily commentary cautioned that the so-called “final deadline” set by Trump could backfire, and warned of a renewed trade war if the US proceeds with reinstating the suspended tariffs.China threatens countries siding with US on supply chain shiftsIn a sharp rebuke to regional economies recalibrating their trade alignments, Beijing also threatened to retaliate against nations entering into supply chain deals with the US that effectively exclude China.Last week, Vietnam struck such a deal, securing a reduction in US tariffs from 46% to 20% on certain goods, with a separate 40% levy applied to Chinese-origin items transshipped through its territory.The People’s Daily declared, “China firmly opposes any side striking a deal that sacrifices Chinese interests in exchange for tariff concessions,” adding that China “will respond resolutely” to any such moves.