April 7 People's Daily on responses to US tariffs 集中精力办好自己的事 增强有效应对美关税冲击的信心

US tariff abuse will impact China, but "the sky won't fall". The US government's imposition of a 34% tariff on China, added to previously imposed tariffs, will severely restrict bilateral trade and inevitably cause short-term negative effects on our exports, increasing economic downward pressure…Facing US variability and extreme pressure, we haven't closed the door to negotiations, but we don't harbor wishful thinking either, having made various preparations to respond to impacts. - April 7th People’s Daily

On Saturday the Chinese government released a statement of its “position opposing U.S abuse of tariffs” and People’s Daily will run a commentary in the Monday, April 7th edition of the paper titled “Focus on Doing Our Own Things Well and Strengthen Confidence in Effectively Responding to U.S. Tariff Impacts 集中精力办好自己的事 增强有效应对美关税冲击的信心”.

The commentary is an important read as an internal message to project resolve and confidence in the face of American “containment and suppression 遏压”, it hints at policy responses to soften the impact on the Chinese economy, and previews the domestic and external propaganda messaging around these new tariffs.

The commentary is more interesting than the Saturday statement and so in this short post I have included a full translation of the People’s Daily April 7th commentary and an excerpt from the statement.

Here are some parts of the commentary that stood out to me:

Our exports to the US as a percentage of total exports have decreased from 19.2% in 2018 to 14.7% in 2024, meaning reduced US exports won't cause a devastating impact on our overall economy. Many US products have high dependency on China. Currently, the US relies on China not only for many consumer goods but also for investment and intermediate products, with dependency exceeding 50% for several categories, making alternatives difficult to find in the international market in the short term…

In recent years, despite internal and external pressures, we have persisted in doing difficult but correct things, continuously resolving risks in key areas such as real estate, local government debt, and small and medium financial institutions. Currently, these three major risks have been effectively controlled and have been effectively contained and are subsiding…

Although international markets generally believe that US tariff abuse exceeded expectations, the Party Central Committee had already anticipated this new round of US economic and trade containment and suppression against China, fully estimated its potential impact, and prepared response plans with sufficient lead time and reserves…

…monetary policy tools such as reserve requirement ratio cuts and interest rate reductions have ample adjustment room and can be introduced at any time. Fiscal policy has clearly stated the need to increase spending intensity and accelerate spending progress, with fiscal deficits, special bonds, and special national bonds having further expansion space as needed. We will boost domestic consumption with extraordinary strength, accelerate the implementation of established policies, and timely introduce reserve policies when appropriate. We will stabilize the capital market and market confidence with substantial policy measures, with relevant contingency policies to be introduced successively…Meanwhile, we will urge the US to correct its erroneous practices and consult with China and other countries in an equal, respectful, and reciprocal manner to properly resolve trade differences…

As a responsible global power, we must turn pressure into motivation, viewing the response to US impact as a strategic opportunity to accelerate the construction of a new development pattern, promote high-quality development, and facilitate economic structural adjustment, injecting more stability into global economic development through our own stable development. Facing the continuous compression of US trade space due to high tariffs, we must increasingly treat expanding domestic demand as a long-term strategy, striving to make consumption the main driving force and ballast for economic growth, leveraging the advantages of our super-large market…

Facing US variability and extreme pressure, we haven't closed the door to negotiations, but we don't harbor wishful thinking either, having made various preparations to respond to impacts.

Full text of People’s Daily commentary - “Focus on Doing Our Own Things Well and Strengthen Confidence in Effectively Responding to U.S. Tariff Impacts 集中精力办好自己的事 增强有效应对美关税冲击的信心”:

The US government, going against global trends, has introduced so-called "reciprocal tariffs" against almost all trading partners, including China. China immediately took firm and powerful countermeasures, drawing global attention. Currently, we should objectively analyze the impact of US tariff abuse on China, rationally view China's positive economic development trends, and strengthen confidence in responding to this round of US containment and suppression.

美国政府逆世界潮流而动，对包括我国在内的几乎所有贸易伙伴出台所谓的“对等关税”，我国第一时间采取了坚决有力的反制措施，引发全球高度关注。当前应客观分析美滥施关税对我影响，理性看待我国经济发展良好态势，坚定应对美这一轮遏压的信心。

(1) US tariff abuse will impact China, but "the sky won't fall". The US government's imposition of a 34% tariff on China, added to previously imposed tariffs, will severely restrict bilateral trade and inevitably cause short-term negative effects on our exports, increasing economic downward pressure.

（一）美滥施关税将对我造成冲击，但“天塌不下来”。此次美国政府对我加征34%的关税，加上此前加征的关税，将严重抑制双边贸易，短期内不可避免地对我出口造成负面影响，加大经济下行压力。

However, we should recognize that China is a super-large-scale economy with strong resilience against US tariff bullying. In recent years, we have actively built diversified markets, reducing dependence on the US market. Our exports to the US as a percentage of total exports have decreased from 19.2% in 2018 to 14.7% in 2024, meaning reduced US exports won't cause a devastating impact on our overall economy. Many US products have high dependency on China. Currently, the US relies on China not only for many consumer goods but also for investment and intermediate products, with dependency exceeding 50% for several categories, making alternatives difficult to find in the international market in the short term. Against the backdrop of deeply integrated global supply chains, China-US trade cannot be completely interrupted. Emerging markets hold enormous potential for economic and trade cooperation, becoming an important foundation for stabilizing our foreign trade. China is the main trading partner for more than 150 countries and regions. Since 2018, our exports to ASEAN have increased from 12.8% to 16.4% of total exports, while exports to Belt and Road countries have risen from 38.7% to 47.8%, maintaining rapid growth momentum. The domestic market provides vast buffer space as an important backup. Statistics show that among hundreds of thousands of export enterprises in 2024, nearly 85% also conduct domestic sales, with domestic sales accounting for nearly 75% of total sales. The government is accelerating efforts to clear policy bottlenecks for "export to domestic sales" conversion, while policies to expand domestic demand are being strengthened, and the absorptive effect of the domestic market will become increasingly evident.

但要看到，中国是超大规模经济体，面对美国的关税霸凌冲击，我们具有强大的抗压能力。近年来我们积极构建多元化市场，对美市场依赖已在下降。我对美出口占全部出口的份额已从2018年的19.2%降至2024年的14.7%，对美出口下降不会对整体经济造成颠覆性影响。美国内不少产品对我依存度较高。当前美国不仅在很多消费品上离不开中国，很多投资品和中间产品也需要从中国进口，有若干品类依存度超过50%，短期内在国际市场上很难找到替代来源。在全球产供链深度交融的大背景下，中美贸易不可能完全中断。新兴市场经贸合作潜力巨大，日益成为我稳外贸的重要基础。我国是全球150多个国家和地区的主要贸易伙伴，2018年以来，我对东盟出口占比由12.8%提升到16.4%，对共建“一带一路”国家出口占比由38.7%提升到47.8%，且保持较快增长势头。国内市场缓冲空间广阔，是重要的大后方。据统计，2024年我有出口实绩的数十万家企业中，接近85%的企业同时开展内销业务，内销金额占销售总额的近75%。国家正加快打通“出口转内销”政策堵点、卡点，扩内需各项政策也在加力扩围，内需市场的容纳效应将日益显现。

(2) China's economy is currently stabilizing and improving, giving us confidence to respond to US tariff impacts. Since the US initiated a trade war against China in 2017, regardless of how the US has attacked or pressured us, we have maintained development and progress, demonstrating resilience that grows stronger under pressure. This has become our greatest foundation for responding to external shocks. Economic circulation continues to improve. In recent years, we have continuously optimized supply, improved demand, and facilitated domestic economic circulation, significantly strengthening economic endogenous momentum. Particularly since the September 26, 2023 meeting of the Central Political Bureau, with the implementation of a series of incremental policies, the domestic economy has continued to recover and improve. In the first two months of this year, domestic demand growth in investment and consumption exceeded expectations, exports initially withstood challenges, and manufacturing and services PMI continued to rise, with the first quarter likely to achieve growth exceeding 5% Technology empowerment continues to gain momentum. We have seized new productive forces as the most important supply factor, insisting on technological innovation driving industrial innovation, achieving multiple breakthroughs in integrated circuits, artificial intelligence, humanoid robots, and other fields, demonstrating the tremendous vitality of China's technological innovation. "Chokehold" tactics and suppression will only force China to accelerate breakthroughs in core technologies in key areas. Risk mitigation has shown significant results. In recent years, despite internal and external pressures, we have persisted in doing difficult but correct things, continuously resolving risks in key areas such as real estate, local government debt, and small and medium financial institutions. Currently, these three major risks have been effectively controlled and have been effectively contained and are subsiding. The real estate market transactions and social confidence are showing positive changes, with first-tier cities showing notable warming trends. Expectations continue to improve. China's long-term stable social environment, continuously optimized business environment, and policy continuity with unwavering goals have provided long-term stable expectations for enterprises. Since the beginning of this year, domestic and foreign views on China's economic prospects have significantly improved, with international organizations such as the OECD and many Wall Street financial institutions raising their forecasts for China's economic growth, viewing China's capital market favorably, and considering China's "certainty" as a safe haven to hedge against US "uncertainty."

（二）当前我国经济企稳向好，应对美关税冲击有底气、有信心。2017年美国挑起对华贸易战以来，无论美国怎么打、怎么压，我们始终保持发展和进步，展现了“越压越强”的韧性，这成为我们应对外部冲击的最大底气。经济循环不断改善。近年来我们持续优化供给、改善需求，畅通国内经济循环，经济内生动力明显增强。尤其是去年9月26日中央政治局会议后，随着一系列增量政策落实，国内经济持续回升向好。今年前两个月，投资、消费等国内需求增长好于预期，出口初步经受住了考验，制造业和服务业PMI持续回升，一季度有望实现5%以上的增长。科技赋能持续发力。我们抓住发展新质生产力这一最重要的供给，坚持以科技创新带动产业创新，在集成电路、人工智能、人形机器人等领域多点突破，展现了中国科技创新的巨大活力。“卡脖子”、打压遏制只会倒逼中国加快实现重点领域核心技术突破。风险缓释成效明显。近年来，我们顶住内外压力，坚持做困难而正确的事，持续化解房地产、地方政府债务、中小金融机构等重点领域风险。目前，三大风险得到有效控制，处于收敛状态。房地产市场交易和社会信心出现积极变化，一线城市回暖态势比较明显。各方预期不断改善。我国长期稳定的社会环境、不断优化的营商环境，咬定目标不放松、一张蓝图绘到底的政策连续性，为企业提供了长期稳定预期。今年以来，海内外对我国经济前景的看法明显改善，经济合作与发展组织等国际组织以及很多华尔街金融机构纷纷上调对我国经济增长的预测，看好中国资本市场，并将中国的“确定性”视为对冲美方“不确定性”的避风港。

(3) Facing the US abuse of tariffs, we are well-prepared with strategies ready. We have been engaged in a trade war with the US for 8 years and have accumulated rich experience in this struggle. Although international markets generally believe that US tariff abuse exceeded expectations, the Party Central Committee had already anticipated this new round of US economic and trade containment and suppression against China, fully estimated its potential impact, and prepared response plans with sufficient lead time and reserves. Last year's Central Economic Work Conference already made comprehensive arrangements for responding to the new round of US containment and suppression, emphasizing the need to enrich and improve the policy toolbox, dynamically adjust policies based on external impacts, strengthen extraordinary counter-cyclical regulation, and enhance the foresight, targeting, and effectiveness of macro-control. At this year's National People's Congress and Chinese People's Political Consultative Conference, many policies we introduced, such as setting this year's fiscal deficit ratio at around 4% and using national debt funds to expand support for "two new" and "two heavy" initiatives, are concrete manifestations of extraordinary policies.

（三）面对美滥施关税的乱拳，我们心中有数、手上有招。我们已与美国打了8年贸易战，积累了丰富的斗争经验。虽然国际市场普遍认为美滥施关税超预期，但党中央对美方对我实施新一轮经贸遏压已有预判，对其可能造成的冲击有充分估计，应对预案的提前量和富余量也打得较足。去年中央经济工作会议已经就如何应对美新一轮对华遏制打压作出全面部署，强调要充实完善政策工具箱，根据外部影响程度动态调整政策，加强超常规逆周期调节，提高宏观调控的前瞻性、针对性、有效性。今年全国两会上，我们出台的很多政策，如将今年财政赤字率确定为4%左右，运用国债资金扩大对“两新”“两重”的支持等都是超常规政策的具体体现。

Looking ahead, depending on situational needs, monetary policy tools such as reserve requirement ratio cuts and interest rate reductions have ample adjustment room and can be introduced at any time. Fiscal policy has clearly stated the need to increase spending intensity and accelerate spending progress, with fiscal deficits, special bonds, and special national bonds having further expansion space as needed. We will boost domestic consumption with extraordinary strength, accelerate the implementation of established policies, and timely introduce reserve policies when appropriate. We will stabilize the capital market and market confidence with substantial policy measures, with relevant contingency policies to be introduced successively. Governments at all levels will provide precision support to industries and enterprises most affected by the impact through "one industry, one plan" and "one enterprise, one policy" approaches, supporting enterprises in adjusting business strategies and guiding them to develop domestic and non-US markets while maintaining US trade as much as possible. Meanwhile, we will urge the US to correct its erroneous practices and consult with China and other countries in an equal, respectful, and reciprocal manner to properly resolve trade differences.

未来根据形势需要，降准、降息等货币政策工具已留有充分调整余地，随时可以出台；财政政策已明确要加大支出强度、加快支出进度，财政赤字、专项债、特别国债等视情仍有进一步扩张空间；将以超常规力度提振国内消费，加快落实既定政策，并适时出台一批储备政策；以实实在在的政策措施坚决稳住资本市场，稳定市场信心，相关预案政策将陆续出台；各级政府将“一行一案”“一企一策”精准帮扶受冲击较大的行业和企业，支持企业调整经营策略，指导帮助企业在尽可能维持对美贸易的同时，开拓国内市场和非美市场。同时，我们将敦促美方纠正错误做法，以平等、尊重、互惠的方式，同中国和世界各国磋商，妥善解决贸易分歧。

(4) Resolutely focusing on our own affairs, responding to external environmental changes through domestic economic structural adjustment. In today's world of accelerating unprecedented changes, US tariff policies further exacerbate uncertainties in global political and economic patterns. As a responsible global power, we must turn pressure into motivation, viewing the response to US impact as a strategic opportunity to accelerate the construction of a new development pattern, promote high-quality development, and facilitate economic structural adjustment, injecting more stability into global economic development through our own stable development. Facing the continuous compression of US trade space due to high tariffs, we must increasingly treat expanding domestic demand as a long-term strategy, striving to make consumption the main driving force and ballast for economic growth, leveraging the advantages of our super-large market. On one hand, from the demand side, we will solidly promote increased income and reduced burdens for residents, improving their consumption capacity and willingness; on the other hand, from the supply side, we will accelerate the construction of a unified national market, improve the business environment, and support domestic enterprises in providing high-quality products and services centered around people's needs.

（四）坚定不移办好自己的事，以国内经济结构调整应对外部环境调整。当今世界百年未有之大变局加速演进，美国关税政策进一步加剧全球政经格局走势的不确定性。作为负责任的全球大国，我们要变压力为动力，将应对美方冲击视为加快构建新发展格局、推动高质量发展、促进经济结构调整的战略机遇，以自身的稳定发展，为全球经济发展注入更多稳定性。面对高关税持续压缩对美贸易空间，我们更要把扩大内需作为长期战略，努力把消费打造成经济增长的主动力和压舱石，发挥超大规模市场优势。一方面，从需求侧入手，通过扎扎实实地推动居民增收减负，提高居民的消费能力与意愿；另一方面，从供给侧发力，加快全国统一大市场建设，改善营商环境，支持国内企业更多围绕老百姓的需求提供高质量产品和服务。

Facing US variability and extreme pressure, we haven't closed the door to negotiations, but we don't harbor wishful thinking either, having made various preparations to respond to impacts. Those united in purpose will win; those weathering storms together will prosper. With the strong leadership of the Party Central Committee and the institutional advantage of concentrating efforts on major undertakings, we will surely turn crises into opportunities and achieve stable, far-reaching development. As General Secretary Xi Jinping pointed out: "The Chinese economy is a vast sea, not a small pond." This vast sea can withstand the baptism of fierce storms and resist the invasion of trade cold currents, ultimately allowing the world to witness the composure and determination of "the sea that embraces all rivers."

面对美方的多变易变、极限施压，我们没有关上谈判大门，但也不会心存侥幸，而是做好了应对冲击的各种准备。上下同欲者胜，风雨同舟者兴。我们有党中央的坚强领导，有集中力量办大事的制度优势，一定能够化危为机、行稳致远。正如习近平总书记所指出：“中国经济是一片大海，而不是一个小池塘”。这片大海经受得起狂风骤雨的洗礼，抵御得住贸易寒流的侵袭，终将让世人见证“海纳百川”的从容与坚定。

The full English text of the statement of position is available here. These excerpts are not surprising:

This is a typical act of unilateralism, protectionism and economic bullying. Under the guise of "reciprocity" and "fairness," the United States is playing a zero-sum game to pursue, in essence, "America First" and "American exceptionalism." It attempts to exploit tariffs to subvert the existing international economic and trade order, put U.S. interests above the common good of the international community, and advance U.S. hegemonic ambitions at the cost of the legitimate interests of all countries. Such action will inevitably face widespread opposition from the international community.

China is an ancient civilization and a land of propriety and righteousness. The Chinese people value sincerity and good faith. We do not provoke trouble, nor are we intimidated by it. Pressuring and threatening are not the right way in dealing with China. China has taken and will continue to take resolute measures to safeguard its sovereignty, security, and development interests. China-U.S. economic relations should be mutually beneficial and win-win in nature. The United States should go along with the shared aspiration of the peoples of the two countries and the world, and, minding the fundamental interests of the two countries, stop using tariffs as a weapon to suppress China economically, and stop undermining the legitimate development rights of the Chinese people…

Development is an inalienable right of all countries, not the exclusive privilege of a few. International affairs should be addressed through consultation, and the future of the world should be decided by all countries. There are no winners in trade or tariff wars. Protectionism is a dead end. All countries should uphold the principles of extensive consultation, joint contribution and shared benefit. They should practice true multilateralism, jointly oppose all forms of unilateralism and protectionism, and defend the UN-centered international system and the WTO-centered multilateral trading system. We are confident that the vast majority of countries, committed to fairness and justice, will stand on the right side of history and act in their best interests. The world must embrace fairness and reject hegemonism!

Thanks for reading, and good luck Monday if you have stock market investments. As I posted earlier today on Notes: