China Threatens Retaliation Over U.S. Trade Deals

By Lawrence Davis

As the United States prepares to end its 90-day suspension on Section 301 tariffs, China threatens retaliation over U.S. trade deals it says are being negotiated at its expense. In a formal warning issued by its Ministry of Commerce on June 29, Beijing stated that it would take “firm, resolute countermeasures” against any nation that enters into bilateral arrangements with Washington that undermine China’s core interests.

The announcement comes just ahead of the July 9, 2025 deadline, when the U.S. exemption window will expire and new tariff decisions will take effect. At the heart of China’s message is a direct challenge to what it perceives as an evolving U.S. strategy to isolate Chinese manufacturing from global supply chains.

Beijing Draws a Hard Line

In its official communiqué, the Chinese Ministry of Commerce warned that “countries acting contrary to China’s interests should be prepared for consequences,” making clear that economic retaliation is on the table. The ministry emphasized that trade should be multilateral and cooperative—not “weaponized” through exclusionary partnerships.

These remarks follow U.S. efforts to recalibrate critical supply chains through limited tariff suspensions granted to strategic partners under the Inflation Reduction Act and the CHIPS and Science Act. China’s position, as formalized in its Ministry of Commerce statement, is that such bilateral arrangements constitute a direct threat to its economic sovereignty.

“We will not allow foreign governments to use China as a leverage point to gain preferential U.S. terms,” the statement declared.

U.S. Tariff Exemptions: A Flashpoint

In April, the Biden administration introduced a 90-day pause on certain tariffs originally imposed under the Trump-era Section 301 framework. The goal was to incentivize U.S. allies to align supply chains away from China while securing digital compliance and trade transparency.

At least a dozen countries—including Vietnam, Mexico, India, and Poland—are currently negotiating exemptions. Others, such as Thailand and Malaysia, are reportedly considering limited engagement.

Beijing has interpreted this rush to sign bilateral pacts as a thinly veiled containment strategy, using economic incentives to divide trade loyalties.

What China Might Do Next

While no specific retaliatory actions were detailed, China’s historical response mechanisms are well documented. According to the Peterson Institute for International Economics, Beijing’s economic toolkit includes:

• Targeted import bans (e.g., Australian wine and beef in 2020)
• Regulatory delays and customs holdups for strategic goods
• Non-tariff barriers that block market access
• Public boycotts encouraged through state-linked media
• Export controls on key inputs, such as rare earths or graphite

Beijing’s intent is clear: countries benefiting from the Chinese economy must not undermine it through U.S.-aligned trade maneuvering.

“We will defend our interests with all available legal and administrative means,” the ministry added.

Southeast Asia: Strategic Pressure Zone

Southeast Asia remains one of the most contested economic arenas. Countries like Thailand, Indonesia, and Malaysia are attempting to walk a fine line—seeking access to American technology and finance while remaining within China’s vast trade network.

In 2024, Thailand’s exports to China surpassed $38 billion, while Chinese capital continued to support infrastructure and logistics development under the Belt and Road framework. At the same time, Thailand is participating in dialogues with the U.S. under the Indo-Pacific Economic Framework (IPEF).

A senior official in Thailand’s Ministry of Commerce, speaking on background, said the government is “monitoring all options carefully” and will act to preserve its trade sovereignty.

Global Trade at a Crossroads

Beyond the regional lens, China’s threat reflects a broader fracture in the global economic order. While the World Trade Organization (WTO) remains the formal arbiter of global trade, its influence is waning in the face of bilateralism, industrial policy, and geopolitically motivated economic blocs.

The OECD Economic Outlook 2025 has warned that decoupling between China and the U.S. could reduce global GDP by as much as 7% over the next decade, citing duplication, fragmentation, and inefficiency in global supply chains. In this context, Beijing’s threats are not just about leverage—they are about preserving a rules-based order that includes, rather than excludes, China.

Conclusion: The Threat Is Real

China threatens retaliation over U.S. trade deals, and this time, the rhetoric has weight behind it. As the July 9 deadline approaches, countries navigating between Washington’s incentives and Beijing’s red lines must tread carefully. Thailand, and others like it, face a difficult diplomatic calculus: benefit from U.S. exemptions now—or face long-term consequences from the region’s largest economic player.

For many, neutrality will not be enough. In a divided trade landscape, decisions made this month may define economic relationships for years to come.

For the latest on Bangkok’s lifestyle, dining, entertainment and more, visit bangkokone.news and follow us on Facebook.