China warns countries against striking deals at its expense, comes as India–US trade talks gather pace

Indian Express

21-04-2025

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.