Beijing: 

The US' high tariffs on China will be a major test for President Xi Jinping’s leadership amid the economic slowdown, while the Trump administration’s levies on Beijing could be far more effective if the US takes allies along, former US ambassador to China Nicholas Burns has said.

Midway through his tariff campaign against several countries, Trump paused the additional duties on other nations for 90 days while imposing more punitive levies on China leaving Beijing to wage a lonely battle to defend its interests.

US President Donald Trump slapped 145 per cent tariffs against Chinese exports and China retaliated with 125 per cent levies on its imports from America. China is the only country to have retaliated with tit-for-tat levies.

“They still have a major hangover from the property bubble," which had caused a severe crisis in the real estate market, the mainstay of the Chinese economy, Burns said.

"The tariff war with the US will be a major test for Xi Jinping simply because the Chinese economy has not performed well in the last few years. Their GDP growth rate is slowing down," Burns told BBC on Friday.

“I don’t think the Chinese government wants to have a sustained trade war. They want to get a trade deal with the United States,” said Burns, who was appointed by former US president Joe Biden and served as American Ambassador to Beijing from 2022 to early this year.

“They are facing a demographic crisis over the next decade or so. Capital has been fleeing," he said, adding that the Foreign Direct Investment (FDI) fell by 32 per cent last year in China.

“So, the way to battle the Chinese effectively, I certainly found as ambassador in Beijing is to get your allies on your side with us. Because the Chinese cannot match that. Instead, the US has put stratospherically high tariffs on those allies depriving us of that unique advantage," he said, referring to Trump’s imposition of tariffs on a host of countries.

He also said Trump should take the US allies along to make the trade war against China more effective. “The other issue is the major miscalculation by the Trump administration. We didn’t include on our side of the trade battle, our major trade partners the EU, Japan, and South Korea and those countries along with the US represent more than 60 per cent of the global GDP”.

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