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By Jacob Gu
China said it has room to ease borrowing costs and reserve rules for lenders if needed to defend its economy against US President Donald Trump’s latest tariffs.
The reserve requirement ratio for financial institutions and the central bank’s policy rates can be cut anytime going forward, the state-owned People’s Daily said in a commentary on Sunday. “There is still room for further expansion of the fiscal deficit, special treasury bonds and special debts.”
On Friday, President Xi Jinping’s government announced it will impose a 34% tariff on all imports from the US starting April 10, matching the level of Trump’s so-called reciprocal tariffs on Chinese products. Authorities in Beijing announced several countermeasures, including immediately restricting exports of seven types of rare earths.
On Saturday, the official Xinhua News Agency said Beijing will continue to take “resolute measures” to safeguard its sovereignty, security and other interests. US tariffs announced last week will raise levies on nearly all Chinese products to at least 54%, potentially crippling exports to the US just as China’s economy is steadying at the start of 2025.
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The article in the People’s Daily, the newspaper of the Central Committee of the Communist Party, suggested a swath of possible measures.
“Extraordinary efforts will be made to boost domestic consumption, concrete and effective policy steps will be taken to firmly stabilize the capital market and restore market confidence, with relevant contingency actions to be rolled out in succession,” it said.
In addition, governments at all levels will provide measured assistance to severely impacted industries and businesses, according to the article. Authorities will support companies in adjusting their business strategies, and guide them to expand into domestic and non-American markets while striving to maintain trade with the US as much as possible.
The commentary acknowledged the tariff impact, saying that the new 34% levy, together with the previously imposed US tariffs, “will significantly suppress bilateral trade.” China’s exports are set to face repercussions in the short term, creating more downward pressure on the economy, it said.
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