Caixin Explains: Impacts of Trump’s Global Tariff War and What Comes Next

Tariff tidal wave: China opposes the latest round of U.S. tariffs and will adopt countermeasures, the commerce ministry said. The levies “will not only damage the United States' own interests, but also endanger global economic development,” a ministry spokesperson said. President Trump announced sweeping new tariffs on many of the country’s trading partners on April 2, including another 34% tax on imports from China, a move observers said could reshape the global economic landscape.

REIT foray: Global logistics real estate giant Prologis has secured a private fund license in China, marking a strategic entry into the country’s developing REIT sector. Through its Beijing subsidiary, the company recently registered with the Asset Management Association of China as a private equity and venture capital fund manager. The move positions Prologis to leverage its corporate REIT expertise in China’s emerging market with 58 public REITs valued at 167 billion yuan ($23 billion) by the end of 2024. With $198 billion in global assets under management, Prologis manages 120 million square meters of property and has a $97.9 billion market cap.

Chip curb: China has firmly opposed Japan’s newly imposed export restrictions on advanced semiconductors and related technologies. On April 3, Japan’s Ministry of Economy, Trade and Industry announced restrictions on dozens of items, including advanced chips, lithography equipment, and cryocoolers needed for quantum computer manufacturing. The new policy requires Japanese exporters to secure ministerial approval before shipping these items. China’s commerce ministry spokesperson warned that these measures will disrupt normal business operations and damage corporate interests in both nations.

Minimum wage hikes: Seven Chinese regions have raised their minimum wages this year, including Fujian, Guangdong and Sichuan provinces. The average hike across the provinces was just over 10%. The central government has decreed that all provincial-level regions should increase their minimum wages this year, after boosting consumption was set as a top priority for 2025.

Minimis no more: The U.S. has officially revoked a tax exemption on low-value imports from China starting May 2, potentially disrupting the business of Chinese e-commerce giants like Shein and Temu that based their business model on the loophole. Trump signed an executive order revoking the so-called de minimis policy for packages valued under $800, claiming that such small packages were being used to smuggle the synthetic opioid fentanyl into the country. A previous effort to revoke the policy earlier this year was abandoned after U.S. customs authorities were overwhelmed by the volume of packages they were suddenly tasked with processing.