China needs friends as Trump's tariffs descend. But Xi may have to go it alone

Beijing has launched a charm offensive with India and other countries as US tariffs tighten. If they can’t be won over, it may have no choice but to stimulate its vast domestic market

- Phillip Inman

China's leader, Xi Jinping, says he is prepared to dance if it means sidestepping some of the worst of Donald Trump's trade tariffs.

Last week, he sent a letter to India's president, Droupadi Murmu, urging her to join him in a tango to celebrate 75 years of bilateral trade. Xi said it was "the right choice" for the two countries to be "partners of mutual achievement and realise the 'Dragon-Elephant tango'", which, he added, "fully serves the fundamental interests of both countries and their peoples".

Beijing is on a wide-ranging charm offensive, aimed at redirecting its exports away from the US to other willing destinations as Washington erects trade barriers. Tariffs on China imposed by the US president amounting to 20% earlier this year were more than doubled last week to 54% and an effective average rate of 65%, raising the cost of Chinese imports to a level that many analysts believe will be uncompetitive.

The response from Beijing was swift. A sell-off on financial markets intensified after China's finance ministry said it would respond in kind, adding 34% to the tariff on all US goods from 10 April.

Investors worry that a recession in the US cannot be ruled out as the trade war intensifies and companies hunker down, cutting investment and jobs to weather the storm.

Here comes a Chinese wave

Fears that China could embark on a campaign of dumping goods or increasing subsidies to help domestic companies win foreign contracts are growing. There are also concerns that the US, already unpopular in much of the developing world, will foster a realignment of global trade that favours authoritarian regimes, including China's. BYD, which has leapfrogged Tesla to produce the world's most popular electric cars, is looking to expand in Europe, despite separate tariffs imposed by the EU and UK limiting European sales.