
China warns countries against striking deals at its expense, comes as India–US trade talks gather pace
Just days before Indian trade negotiators are due to visit the United States on April 23 to advance trade deal discussions, China has cautioned countries against entering into trade agreements with the US at its expense. The warning coincides with US President JD Vance beginning his four-day visit to India on Monday.
'China firmly opposes any party reaching a deal at the expense of China's interests. If this happens, China will not accept it and will resolutely take reciprocal countermeasures,' the Chinese Ministry of Commerce said in a statement.
The warning comes amid a renewed escalation in the US–China trade war, with both countries seeking to forge trade deals with nations within their respective spheres of influence. While the US is negotiating agreements with India, Japan and South Korea, China is pushing ahead with deals involving Vietnam, Malaysia and Cambodia.
China's warning of retaliation against countries seen aligning with the US efforts to isolate Beijing must be viewed through the lens of global supply chain realities, said Ajay Srivastava, former trade officer and head of the think tank Global Trade Research Initiative (GTRI). Most major economies—including the US, EU, Japan, South Korea and India—remain heavily dependent on China for the supply of industrial and consumer goods, he noted.
'China is embedded at every level of the global production hierarchy: Tier 1 (finished goods), Tier 2 (intermediate goods), and Tier 3 (parts and components). While the China+1 strategy has enabled some countries to reduce dependence on Chinese finished goods, the global economy still relies heavily on China for critical inputs at the Tier 2 and Tier 3 levels. Replacing China entirely requires building manufacturing capabilities from the raw material stage upwards—an effort that no country has yet achieved at scale,' Srivastava said.
He added that India must chart an independent course—strengthening its domestic manufacturing base and reducing critical import dependencies through targeted investment in deep manufacturing—while remaining firmly committed to WTO-led multilateral trade norms and avoiding actions that could breach global rules.
During his visit to Vietnam, Chinese President Xi Jinping said, in an official statement: 'As beneficiaries of economic globalisation, both China and Vietnam should strengthen strategic resolve, jointly oppose unilateral and bullying acts, uphold the global free trade system, and maintain stable global industrial and supply chains.'
Xi added that both countries are committed to openness and to playing a positive role in ensuring regional industrial and supply chain resilience, as well as in promoting economic globalisation. 'A single small boat may not survive a ferocious storm; only by working together can we sail steadily and far,' he said.
Meanwhile, India–US negotiations are progressing, with the Ministry of Commerce and Industry expanding its NAFTA division, which manages India's bilateral trade relations with the US, Canada and Mexico.
India and the US are currently negotiating a bilateral trade agreement aimed at more than doubling trade—from the current $191 billion to $500 billion by 2030. The first phase of the deal is expected to be concluded by autumn this year.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Indian Express
an hour ago
- Indian Express
Trump says China trade deal ‘done': 55% tariff, supply of rare earth minerals
President Donald Trump said Wednesday that the United States has reached a trade agreement with China, including an easing of curbs imposed by Beijing on export of rare earth minerals and magnets that are key inputs for industries ranging from automobiles to electronics. 'Our deal with China is done, subject to final approval with President Xi and me,' Trump said in a post on Truth Social. He said China would supply 'any necessary rare earths' and magnets, while the US would make concessions on allowing Chinese students to attend American universities. The Trump administration had recently begun to clamp down on the presence of Chinese nationals on US college campuses. 'We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent!' Trump wrote, without elaborating. Bloomberg quoted a White House official as saying that the agreement allows the US to charge a 55 per cent tariff on imported Chinese goods, which, crucially, includes a 10 per cent baseline 'reciprocal' tariff, a 20 per cent tariff for fentanyl trafficking, and a 25 per cent tariff reflecting pre-existing tariffs (imposed by Trump in his first term, that the Biden administration persisted with). China would charge a 10 per cent tariff on American imports, the official said. Though the details of the deal were still unclear, analysts predicted that China seems to have gained the upper-hand after its rare earth restrictions prompted US carmakers, including Ford Motor and Chrysler, to cut production. Significantly, Trump said a final deal is subject to approval from him and Chinese President Xi Jinping. Chinese state media said earlier Wednesday that Beijing had reached a 'framework' for an agreement with the US during talks in London, but there was no official response from China on Trump's subsequent claims on Truth Social. Earlier, both the negotiating sides said they had agreed in principle to a framework for dialling down trade tensions between the world's two biggest economies. After the meeting in London — the second time the two sides have met in the last couple of months, since Trump's sweeping tariff onslaught — there were indications of a reconciliation. What is beginning to get clearer after the second meeting is that this is perhaps not how the US imagined the trade war to unfold. China is beginning to dictate the direction of the bilateral talks, with the US almost seen as requesting for much-needed concessions on the resumption of supplies of critical inputs. In the first round of talks in Geneva, the US delegation led by Treasury Secretary Scott Bessent had asked the Chinese to cut its tariffs in tandem with theirs, primarily because the Americans were facing the heat back home from the early fallout of the high tariffs, including empty shelves at grocery stories and surging prices of daily use commodities. In London, the US side is learnt to have specifically asked the Chinese to 'suspend or remove' restrictions on rare earths magnets, which had forced a supply-chain crunch. The London meeting follows a call between Trump and Xi on June 5, which was initiated by the White House — the first call since Trump's reciprocal tariff announcement. After the London talks, US Commerce Secretary Howard Lutnick said the deal should result in restrictions on rare earth minerals and magnets 'being resolved'. 'We have reached a framework to implement the Geneva consensus… Once the Presidents approve it, we will then seek to implement it,' he said. 'The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state during the phone call on June 5 and the consensus reached at the Geneva meeting,' the BBC quoted China's Vice Commerce Minister Li Chenggang as saying. Chinese export controls over rare earth minerals were high on the agenda of the meetings. While Beijing has not imposed an outright ban on the export of rare earth magnets, the process has been made very difficult; it could take a long time to source, posing shortage risks. Rare earth magnets, especially neodymium-iron-boron (NdFeB) magnets, are crucial for EV manufacturing. They provide the strong magnetic fields needed for efficient and powerful electric motors, including traction motors that drive EVs. These magnets also play a major role in other EV components like power steering systems, wiper motors and braking systems. China has a virtual stranglehold over these rare earth magnets. In May, talks held in Geneva led to a temporary truce after the tit-for-tat tariff increases by both sides, which led to duties that peaked at 145 per cent. Trump called the outcome of the talks in Switzerland a 'total reset', which brought US tariffs on Chinese products down to 30 per cent, while Beijing cut duties on US imports to 10 per cent. Both sides also agreed to a 90-day deadline to try to reach a trade deal. However, the US and China have since accused each other of breaching the deal. The US has said that Beijing has been dragging its feet on opening up exports of rare earth metals and magnets while the Chinese claim that Washington has restricted its access to American goods such as semiconductors and other related technologies linked to artificial intelligence. US Trade Representative Jamieson Greer had said China had failed to roll back restrictions on exports of rare earth magnets. In the run-up to this week's talks, the Chinese Ministry of Commerce said on Saturday that it had approved some applications for rare earth export licences. The problem for the US is that the Chinese side has wrested some advantage, especially by leveraging its strategy of weaponing its dominance in key sectors. Rare earth minerals and magnets is one such area, where the US is now desperate for concessions. Both sides have since claimed breaches on non-tariff pledges, but the Americans clearly seem more eager for a reconciliation, given the impact of the Chinese blockade on its key manufacturing sectors. These Chinese trade blockades are already impacting companies in other geographies. Hamamatsu-based small car maker Suzuki Motors, for instance, said last week it plans to suspend the production of its flagship Swift compact hatchback due to China's rare earth restrictions, becoming the first Japanese automaker to be impacted. There are similar worries among other manufacturing entities across the world, including in the US. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More


India Today
an hour ago
- India Today
Crippled by Op Sindoor strikes, Pak eyeing Germany for air defence upgrades
Rattled by the devastating impact of BrahMos missile strikes during India's Operation Sindoor, Pakistan is now exploring the procurement of a new air defence system to counter future to sources, Islamabad is actively considering the purchase of the IRIS-T SLM air defence system from Germany in a bid to strengthen its aerial shield against India's supersonic cruise missiles, particularly the move comes after Pakistan's existing Chinese-origin air defence systems, including the HQ-9 and HQ-16, failed to detect or intercept Indian missile attacks during the operation. In contrast, the IRIS-T SLM system has demonstrated significant effectiveness in recent combat situations. In Ukraine, where several units were redirected from Egypt due to the ongoing war, the German-made system has reportedly shot down over 60 aerial targets since its deployment last it was said to have successfully intercepted Russian Oniks missiles, which are similar in profile to India's by Diehl Defence, the IRIS-T SLM is known for its modular and compact architecture. Each unit, estimated to cost around USD 200 million, includes radar, an operations centre, and launchers, all mounted on a 20-foot interest in the system highlights its urgent push to rebuild and upgrade its air defence network, particularly after key air bases were damaged by Indian missiles during Operation grappling with a severe economic crisis, Pakistan has raised its defence budget by 18 per cent this year while simultaneously scrapping domestic development projects valued at 1,000 billion Pakistani the past month, the country has secured financial assistance totalling USD 1.8 billion from the International Monetary Fund (IMF) and the Asian Development Bank (ADB) to address its fiscal Germany's Diehl Defence, the maker of the IRIS-T SLM, is also involved in a major Indian defence initiative. The company is collaborating with Thyssenkrupp Marine Systems on Project 75I, a Rs 70,000 crore programme to build six submarines for the Indian Indian-German collaboration also includes the development of the Interactive Defence and Attack System (IDAS), which will be integrated into the India's Reliance Defence has announced a partnership to manufacture Vulcano 155mm precision-guided artillery shells domestically. The initiative is expected to generate revenues of approximately Rs 10,000 crore, with over 50 per cent of the components to be produced indigenously.


India.com
an hour ago
- India.com
India Won Operation Sindoor – But What Does The Army Want Next, And Who Poses The Greatest Threat?
New Delhi: India crushed Pakistan's assault during Operation Sindoor. But after the dust settled, something more alarming came into view. China was not sitting on the sidelines. It was pulling strings from behind the curtain. Indian radars picked up Chinese-made jets in Pakistani skies. Chinese missiles were used to target Indian bases. Beijing was deeply involved. That means India was not fighting just Pakistan. India was up against two enemies at once. Military officers have sounded the alarm. They want India's defence budget raised to 2.5% of the Gross Domestic Product (GDP). Right now, the defence allocation stands at just 1.9%. A huge portion of that money goes into salaries and pensions. Only a quarter of it helps modernise the military. This cannot continue. Not when two hostile neighbours are preparing for something bigger. China has been pumping weapons into Pakistan. In the May 7-10 clashes, Pakistan deployed Chinese J-10 jets and HQ-9 missile systems. Beijing has promised to send more – stealth fighters, long-range air defence weapons and new-generation drones. China is flooding Pakistan with cutting-edge military tools. Pakistan's economy is in crisis. But even then, Islamabad raised its defence budget by 20%. It cut development. It ignored debt. It focused on weapons. India must respond, believe experts, arguing that it is time for total self-reliance in defence production. India must build fighter jets, drones, loitering munitions and missiles on its own. The private sector must step in. Half-measures will not do. Half-prepared armies lose wars. India's Advanced Medium Combat Aircraft (AMCA) project has started moving. But it must move faster. Tejas took decades. The same mistake cannot happen again. The Indian Air Force is short on fighter squadrons. It has just 30. The target is 42.5. Drones are the new face of war. Swarm drones. FPV kamikaze drones. Loitering drones. India needs all of these, and it needs them in bulk. No country will come to India's rescue in a full-scale war. India must stand on its own. During Operation Sindoor, India used Russian S-400s, Israeli Barak-8s and its own Akash missiles. These systems intercepted and neautralised many Pakistani drone and missile attacks. But more layers are needed. DRDO must now accelerate two things – short-range air defence systems and long-range strike missiles like Project Kusha. Military reform is also crucial. India has a huge army. It must cut unnecessary spending. It must remove red tape from weapons procurement. And it must create joint theatre commands that allow the Army, Navy and Air Force to fight as one. A senior military commander put it bluntly. India is now staring at a superpower that is feeding a hostile neighbour. Pakistan may fire the bullets. But China is loading the gun. India cannot look away anymore. The next battle may not wait for long.