China has cautioned that neither nation stands to benefit from a trade war, responding to U.S. President-elect Donald Trump’s recent threat to impose a 10% tariff on all Chinese imports. The statement, released by the Chinese Embassy in Washington on Monday, comes amid escalating tensions as Trump prepares to take office on January 20.
Mutual cooperation highlighted
Chinese Embassy spokesperson Liu Pengyu emphasised the importance of economic collaboration between the two countries. “China believes that China-US economic and trade cooperation is mutually beneficial in nature,” Liu stated. “No one will win a trade war or a tariff war.”
Trump justified the potential tariffs as a measure to pressure China to curb the flow of illegal drugs, specifically fentanyl, into the United States. However, Liu pointed to China’s ongoing efforts to combat drug trafficking, asserting that Beijing has been proactive in addressing U.S. concerns following a bilateral agreement reached last year between President Joe Biden and Chinese President Xi Jinping.
Combating fentanyl trafficking
The misuse of fentanyl, a potent synthetic opioid, has become a major public health crisis in the U.S., with overdose deaths reaching alarming levels. Trump’s accusations have placed China under scrutiny for allegedly allowing the flow of fentanyl precursors into the U.S.
In response, Liu dismissed such claims as baseless. “The idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality,” he said. Liu highlighted China’s steps to enhance law enforcement and control over chemicals used to manufacture fentanyl.
Progress has been noted in the joint efforts between the two nations to tackle illicit trafficking. Following the agreement between Xi and Biden, the United States has urged China to strengthen measures, including cracking down on illicit financial transactions and tightening controls on precursor chemicals.
Tangible progress in drug control
China has demonstrated some commitment to addressing the issue. In June, China’s top prosecutor called for a heightened focus on drug trafficking. Shortly thereafter, Beijing and Washington announced a rare joint investigation into the illicit drug trade.
In August, China took additional steps by imposing tighter regulations on three key chemicals involved in the production of fentanyl. The measures followed a meeting of a joint counternarcotics working group, reflecting incremental progress in Sino-American cooperation.
Escalating trade tensions
Despite these collaborative efforts on drug control, the looming threat of a trade war casts a shadow over broader diplomatic relations. Trump’s proposed tariffs are reminiscent of his previous presidency, which saw tariffs imposed on billions of dollars’ worth of Chinese goods as part of a broader trade conflict.
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China’s warning underscores the potential economic fallout of such measures. “No one will win,” Liu reiterated, suggesting that tariffs would harm both nations’ economies and disrupt global trade.
The bigger picture
Economic ties between the U.S. and China, the world’s two largest economies, have long been a cornerstone of their relationship. However, issues such as trade imbalances, intellectual property disputes, and geopolitical tensions over Taiwan and the South China Sea have strained relations in recent years.
While the fentanyl crisis represents a shared challenge with scope for collaboration, Trump’s tariff threat could hinder progress in other areas of cooperation. Analysts fear that escalating trade tensions could spill over into diplomatic and security domains, further complicating an already fragile relationship.
Looking ahead
As the January 20 inauguration approaches, it remains unclear whether Trump will act on his tariff threats. For now, China’s response reflects both its readiness to counter unfounded accusations and its hope to preserve stable economic ties.
With the fentanyl crisis affecting thousands of American lives annually, continued joint efforts between Beijing and Washington in tackling drug trafficking could provide a pathway for restoring trust. However, the threat of a renewed trade war serves as a reminder of the fragile balance between cooperation and conflict in U.S.-China relations.
The coming months will reveal whether diplomacy can prevail over protectionism, or if economic tensions will reignite a broader confrontation.
