China stands up to Trump and announces 84% tariffs on all US products.

BeijingChina is keeping its finger on the pulse of Donald Trump and responding to his trade war with new 50% tariffs on all US imports, a move that raises the total tariffs that all American goods will now face to 84%. Beijing's move escalates the trade clash between the two powers after the US imposed 104% tariffs on Chinese products as part of its new global policy.

Experts estimate that Chinese companies cannot afford a reduction in their revenues of more than 40%, so the tariff escalation has already passed what can be considered a point of no return.

The Asian giant affirms that it will adopt "strong" measures to defend its interests. It claims to have a battery of measures that range from the People's Bank of China (BOC) commitment to inject liquidity to stabilize the market to boost domestic consumption.

The government has intervened in the capital markets to bolster investor confidence by urging sovereign wealth funds to buy assets to prevent stock market declines; even numerous listed Chinese companies have announced plans to buy back their shares. The yuan has also begun to devalue to gain competitiveness.

Xi Jinping has also called for stronger ties with neighboring countries with the aim of diversifying its market, but above all, Beijing is willing to boost domestic consumption to absorb the fall in exports.

The reaction of the world's "factory"

While China resists and recoils, Southeast Asian countries are seeking ways to negotiate tariff reductions with the United States, given the country's limited capacity to take countermeasures. China's Asian neighbors are seeking direct dialogue and, at most, are considering some kind of united response from the ten members of ASEAN (Association of Southeast Asian Nations).

Southeast Asia is the region hardest hit by Trump's tariffs, along with China. In recent decades, the region's development has been based on its productivity and on following the Asian giant's lead and becoming the world's new factory. These economies are highly dependent on exports, but they are still developing countries with limited import capacity, leaving them little room to counterattack. Access to raw materials, opening their markets to American products in competition with local ones, and deregulation are all they can offer.

Despite the good relations the United States maintains with these countries, precisely to curb Chinese influence, Donald Trump has not hesitated to punish them simply for their trade surplus.

Indonesia has already announced that for the moment it will not take any retaliatory measures for the 32% tariffs imposed by Trump. The government is open to increasing US imports of agricultural and mineral products, but above all it is open to relaxing the Domestic Component Level (TKDN) policy that affected Apple, since it requires phones and tablets sold in Indonesia to have 40% locally manufactured components. Indonesia, with 280 million inhabitants, is one of the largest telephone markets in the world.

Vietnam, Laos, and Cambodia have received the hardest blow, as the new tariffs are around 50%. Indirectly, these rates also punish Beijing, which has been relocating its factories to these countries for some time. The Asian giant was seeking cheaper labor costs and to circumvent the tariffs imposed on Chinese products.

It is estimated that around 15% of Vietnamese exports to the United States actually come from Chinese-owned factories. In Vietnam, the production destination for many American brands such as Nike and Adidas, the imposition of the 46% tariff has been a shock. Until now, exports to the United States contributed 23% of the country's GDP. The Vietnamese government has already offered Trump the opportunity to eliminate the tariffs on a reciprocal basis between the two countries, so far without success.

Pedro Sánchez in Vietnam

From Vietnam, the Spanish Prime Minister made a plea in favor of free trade and multilateralism, asserting that "no one wins from trade wars." Pedro Sánchez is making a long-planned official trip to Vietnam and China, but it is taking place in the midst of the tariff crisis with the United States.

The Spanish Prime Minister announced €350 million in loans to support Spanish investments in Vietnam and signed agreements in agriculture and fishing, culture and sports, and collaboration in diplomatic schools. In Hanoi, Sánchez emphasized that the economies of Spain and Vietnam are among the most dynamic in the world and that the agreements will allow "movement toward a comprehensive strategic relationship."

Interestingly, Cambodia has been penalized with the highest tariffs, 49%. In that small country with a poverty rate of 17.8%, according to the Asian Development Bank, the textile industry is the main employer. If exports are cut, the economy will suffer, but it's a warning to Beijing, as roughly half of exporting companies are Chinese-owned.

The Asian Development Bank has warned that Trump's tariffs will reduce growth in Asia-Pacific economies.