China Floats Policy Easing After Tariff Escalation
China signaled it has room to lower borrowing costs and ease reserve requirements for lenders if necessary to counter the economic impact of U.S. President Donald Trump’s latest tariffs, according to Monday's front-page commentary in the People’s Daily, the Communist Party’s flagship newspaper. Officials indicated that the reserve requirement ratio and key policy rates could be cut at any time.
The article also noted the scope for expanding the fiscal deficit, issuing special treasury bonds, and increasing special debt. On Friday, Beijing retaliated against Trump’s latest tariff measures with sweeping levies on all U.S. goods and fresh export controls on rare earths—moves that rattled global markets. The Chinese government announced a 34% tariff on all American imports starting April 10, mirroring the level of the U.S.’s so-called reciprocal tariffs on Chinese goods. Trump quickly denounced the response, calling it the “wrong” move.
Source: Trading Economics
