China’s Response to U.S. Tariffs

BEIJING (Reuters) – China’s top policymakers pledged to support firms and workers affected by triple-digit U.S. tariffs, according to the ruling Communist Party’s Politburo on Friday.

The Politburo, a key policy decision-making body, reiterated plans to accelerate debt issuance and ease monetary policy while committing to support employers in safeguarding jobs. This aims to maintain stability at home as China prepares for a prolonged trade war with the United States.

A report from state media Xinhua quoted the Politburo as stating, “The fundamentals of China’s sustained economic recovery need to be further consolidated, and the impact of external shocks is rising.”

They emphasized the importance of stabilizing employment, enterprises, markets, and expectations, and responding to external uncertainties with high-quality development.

The meeting urged preparation for the “worst-case scenarios” and taking concrete steps in economic planning. Specifically, the country will increase the proportion of unemployment insurance funds that can be returned to companies heavily affected by tariffs to stabilize jobs.

Xinhua reported, “Multiple measures should be taken to help enterprises in difficulty, strengthen financing support, and accelerate the integration of domestic sales and foreign trade.”

China also plans to cut interest rates and the banks’ reserve requirement ratio in a timely manner and foster consumption in the services sector.

Although China’s economy grew by 5.4% in the first quarter—exceeding expectations—concerns remain about a potential economic downturn due to U.S. tariffs, representing one of the biggest risks to the world’s second-largest economy in decades.

U.S. President Donald Trump and Treasury Secretary Scott Bessent adopted a more conciliatory tone this week, suggesting that the tariffs were unsustainable and signaling a willingness to de-escalate the trade war.

However, Beijing has called for the removal of tariffs to facilitate discussions.