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Stock prices in the Asia-Pacific region fell amid the US-China tariff war

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In the Asia-Pacific region, the value of major stock exchanges fell due to Trump’s threat to impose triple-digit tariffs on Chinese imports. China holds reserves of strategically important rare minerals, which also underpin its global dominance. Although trade negotiations between the two countries had made progress over the summer, Beijing’s decision to tighten export controls on these minerals was prompted by the US decision to implement new export restrictions against China.

The new trade restrictions imposed by China, which will take effect in November, will impact the economies of East Asian countries, particularly Japan, South Korea, and Taiwan. Each of these countries plays a fundamental role in the production of cutting-edge artificial intelligence and technology products. Washington actively uses economic pressure as a lever of geopolitical influence. Accordingly, in response to Beijing, Trump’s decision will impose an additional 100 percent tariff on Chinese goods, raising the total duty to 130 percent. Effectively, the US is declaring a trade embargo on China, as Chinese goods will be unable to enter the American market.

Amid prolonged trade tensions, US stock exchanges were also affected. After the S&P 500 and Nasdaq experienced their sharpest declines, Trump wrote on Trust Social that the US “wants to help China, not hurt it.” “Don’t worry about China, it will be all fine!”  Following Trump’s comments, the US stock market improved on Sunday evening.

On Sunday, Beijing warned the United States. According to a statement released by the Ministry of Commerce, China’s position remains unchanged: “We do not want a tariff war, but we are not afraid of it either”.

The next wave of counter-response trade restrictions will erase the progress achieved during the months of meetings between Chinese and US officials. At this time, it is unclear whether Trump will actually implement the tariff threat by November 1 or if the situation will be resolved.

On Sunday, speaking to journalists aboard Air Force 1, Trump said, “Let’s see what happens”, when asked about the November 1 deadline. In the Fox News program The Sunday Briefing, US Trade Representative jamieson greer said that the United States was unaware of China’s motives and did not expect the export restrictions, although Chinese officials stated that regional and national-level notifications had been made.

At the same time, Vice President JD Vance urged China to “choose the path of reason,” while emphasizing that the US holds “far more cards” if Beijing chooses to respond aggressively. As a result, a counter-response is likely, making it much harder for the two countries to find common ground and maintain economic stability.

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China Introduces New Port Fees on U.S

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China’s Ministry of Transport has announced that vessels owned or registered by U.S. companies, organizations, and individuals will be subject to additional port fees starting October 14. The measure, approved by the State Council, is widely seen as a geopolitical counterreaction to trade policies pursued by the Trump administration.

The decision comes shortly after the United States imposed new tariffs on Chinese goods — a move that Beijing has condemned as unfair economic pressure. Washington’s step is closely tied to China’s export control measures aimed at limiting the sale of strategic materials, such as rare metals and minerals, essential for high-tech industries. Western analysts have described China’s restrictions as an attempt to disrupt U.S. supply chains that heavily depend on Chinese raw materials. 

In this context, China’s plan to gradually raise port fees between 2025 and 2028 — from 400 to 1,120 yuan per ton — reflects Beijing’s long-term strategy. On one hand, it mirrors U.S. tariffs with a symmetrical response; on the other, it preserves policy flexibility, allowing the government to adjust both the rate and scope of the fees as needed. 

The administrative framework of the new fee is also notable. The charge will increase with each ship’s first annual entry and will apply no more than five times per year — a structure designed to limit disruptions in international shipping and avoid destabilizing global trade networks. 

China’s Ministry of Transport added that the country will continue to take reciprocal actions within the framework of law, a diplomatically phrased warning that signals Beijing’s readiness for further economic countermeasures if necessary.

According to the analytical firm Linerlytica, Chinese shipping operators active in the U.S. market could face around $1.15 billion in fees in the first year alone, compared to just $180 million for U.S. companies — highlighting the asymmetry in tariff impacts that China aims to offset with proportional measures. 

Meanwhile, the China Shipowners’ Association has urged the government to adopt tougher steps, including imposing additional charges on foreign vessels and implementing targeted counterreactions if required.

Data from Alphaliner shows that by 2026, U.S. tariffs will cost the world’s leading shipping companies roughly $3.2 billion, with China’s state-owned COSCO Group expected to be among the hardest hit due to its extensive fleet operating between China and the United States.

The issue is expected to be a key topic during the upcoming meeting between U.S. President Donald Trump and Chinese leader Xi Jinping later this month. Experts predict that the escalating port fee dispute will mark a new phase in trade relations, where economic measures increasingly evolve into geopolitical instruments.

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China and Malaysia to hold “Peace and Friendship-2025” joint exercise

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The armed forces of China and Malaysia will resume the series of joint exercises from the middle of October 2025. According to the Chinese Ministry of National Defense, the program, named “Peace and Friendship-2025”, will be held in Malaysia and its adjacent waters.

Within the framework of this project, the history of military cooperation between China and Malaysia began in 2014. The exercises were primarily focused on joint search and rescue and humanitarian aid.

In 2018, the 4th “Peace and Friendship” initiative was conducted in an expanded format, where, in addition to China and Malaysia, Thailand was also involved in the training. In 2023, the program expanded even further, as Cambodia, Laos, and Vietnam also participated in the joint exercises.

The exercises are usually focused on non-warfare operations (Military Operations Other Than War – MOOTW), for example, humanitarian assistance, disaster relief, and counter-terrorism.

It is important that other ASEAN member states will also be invited as observers to the announced 6th “Peace and Friendship” initiative.

The initiative aims to strengthen practical cooperation between the militaries of China and Southeast Asian nations, improve their ability to jointly respond to non-traditional security threats, and maintain regional peace and stability.

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High-level Visit of China’s Prime Minister to North Korea

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China’s Prime Minister Li Qiang will travel to North Korea this week to attend celebrations held for North Korea’s ruling party’s 80th anniversary this Friday. The high-level visit will last from October 9 to 11. The anniversary will include a massive military parade in Pyongyang, demonstrating North Korea’s military might. The Russian former president Dmitri Medvedev is expected to attend the celebrations on behalf of Russia.

Li Qiang’s visit represents the highest-level Chinese trip to North Korea since 2019. However, North Korean leader Kim Jong Un attended a Beijing military parade recently this September alongside Russian president Vladimir Putin. Since taking office in 2011, this was the first time Kim participated in an event with such a large gathering of world leaders and politicians.

During this summit, China and North Korea pledged to deepen bilateral cooperation. China for years have been North Korea’s biggest trading partner and continues to be. North Korea, for its part, expressed its willingness to strengthen ties with China and “in multilateral affairs, jointly resist unilateralism and power politics and promote a fairer and more just world order”. The emphasis on unilateralism here probably stems from heavy U.S sanctions on North Korea over its nuclear program and the recent imposition of tariffs on Chinese goods. 

Amid these developments and statements, U.S. President Donald Trump posted on social media, addressing China’s president directly, advising him with irony to give his warmest regards to Russian and North Korean leaders “as you conspire against The United States of America”. The upcoming gathering of Russian, North Korean, and Chinese leaders in North Korea will likely spark renewed tension and speculation about their joint cooperation against the U.S. However, North Korean leader Kim Jong Un, in a letter congratulating  Putin on his birthday, framed the alliance among Pyongyang, Moscow, and Beijing as a step forward toward a “just and multi-polarised world order”.

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Zambian farmers sue Chinese mining companies for ecological disaster

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Over the decades, Zambia and China have developed strong economic relations. China has financed various infrastructure projects, including airports and railway systems. Chinese companies play a dominant role in Zambia’s copper and cobalt mining and processing sectors.

However, a lawsuit filed by 176 Zambian farmers against local subsidiaries of Chinese companies Sino-Metals Leach Zambia and NFC Africa Mining has triggered a diplomatic crisis. The farmers’ protest was provoked by an incident in February, when the collapse of a tailings dam caused acidic waste to spill into nearby rivers near the town of Kitwe, located about 285 kilometers north of the capital, Lusaka. The spill damaged farmland, and farmers described the event as an environmental disaster that violated their constitutional right to live in a safe and healthy environment. The toxic waste contaminated the soil and destroyed crops.

Supporters of the petition emphasized that the population was not promptly warned about the danger and had to live in an ecologically polluted environment for seven months. The farmers are therefore demanding $ 80 billion in compensation and an additional monthly payment of $ 336 for eco-migrants.

The environmental crisis has also drawn international attention. Dr. Iva Pesa, Assistant Professor at the University of Groningen in the Netherlands, stated that the farmers’ demand for 80 billion USD carries a symbolic meaning. According to her, the petitioners themselves likely knew that receiving such a large sum was unrealistic. Therefore, it is reasonable to assume that their goal is to stop the operations of the Chinese companies’ subsidiaries.

For Zambians, it is more acceptable and easier to confront small Chinese firms and file lawsuits against them than to go after major local mining giants such as ZCCM or Mopani, which appear to provide broader economic benefits to local communities primarily through employment opportunities. According to Pesa, the farmers’ lawsuit was less motivated by environmental activism and more by a desire to share in the economic benefits:

Chinese companies earn enormous profits. Naturally, part of this economic benefit should be distributed to the local communities whose living areas have been devastated by toxic substances.” – Iva Pesa.

Meanwhile, the Zambian government has attempted to downplay the environmental impact of the incident. In August, Minister Cornelius Mweetwa stated that there was no need to declare a state of emergency. The government and Sino-Metals claimed that the pH level in the affected area had returned to normal and that compensation of 14 million kwacha had already been provided to residents. However, the government’s active lobbying in favor of Sino-Metals may ultimately lead to widespread electoral absenteeism. This incident could mark the beginning of the end for state-level relations between Zambia’s political and economic elites and China.

This is the first time a major mining company in Zambia has been accused of environmental destruction. The Zambian farmers’ protest has caused a significant diplomatic rift. Although the U.S. Embassy has also described the incident as an ecological disaster, China’s Foreign Minister denied any connection between the catastrophe and the Chinese subsidiaries or their management, claiming that they were actively cooperating with the Zambian authorities.

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Thailand-Cambodia Rapprochement: China’s Diplomatic Role

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Thailand and Cambodia have reconfirmed their ceasefire agreement reached after several days of conflict in the disputed border region. This confirmation followed China’s diplomatic intervention, which facilitated a meeting between the two sides in Shanghai.

Although the ceasefire agreement, formalized in Malaysia, was supposed to take effect from midnight on July 28, 2025, its effectiveness was quickly tested. Thailand’s army accused Cambodia of carrying out multiple attacks on the morning of July 29, 2025, though the Cambodian side denied any firing. Thailand’s Ministry of Foreign Affairs characterized this action as an “act of aggression” and a “clear violation” of the ceasefire agreement.

By midday on July 30, 2025, both parties appeared to have reaffirmed their commitment to the ceasefire. At a meeting in Shanghai, representatives from Cambodia and Thailand were pictured smiling with Chinese Vice Minister Sun Weidong, indicating a de-escalation of tensions between the sides. China’s Ministry of Foreign Affairs stated that this informal meeting represented its “latest diplomatic effort” and that China was playing a “constructive role” in resolving their border dispute.

Malaysian Prime Minister Anwar Ibrahim, the acting chair of the Association of Southeast Asian Nations (ASEAN), hosted the meeting where the ceasefire was agreed upon. United States Secretary of State Marco Rubio positively assessed the ceasefire declaration, emphasizing that President Donald Trump and he were “committed to an immediate cessation of violence.” Cambodian Prime Minister Hun Manet stated that Trump had called him to congratulate him on the peace initiative.

Clashes between Cambodia and Thailand have frequently occurred along their 800-kilometer (500-mile) border in the past. The most recent battles began on July 24, 2025, after a landmine explosion along the border wounded five Thai soldiers. The conflict resulted in at least 41 deaths and displaced over 260,000 people from their homes. While some residents are now returning, many still remain in evacuation shelters amidst uncertainty.

Thailand-Cambodia Rapprochement: China’s Diplomatic Role Read More »

EU-China Summit: 50 Years Amidst Tense Relations and New Challenges

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To mark the 50th anniversary of relations between the EU and China, the 25th summit was held in Beijing on July 24, 2025. Leaders from both sides discussed all aspects of their bilateral relationship, as well as geopolitical issues, including Russia’s war in Ukraine. The EU was represented by European Council President António Costa and European Commission President Ursula von der Leyen, while China was represented by President Xi Jinping and Premier Li Qiang. A joint press release on climate change was issued during the summit.

The mood before the summit was tense, with low expectations for concrete bilateral agreements. The tension stemmed from trade disputes, particularly concerning market access and critical rare earth elements, as well as geopolitical strains, primarily Russia’s ongoing war in Ukraine. The EU views China as a partner for global challenges, an economic competitor in developing new technologies, and a systemic rival.

European Commission President Ursula von der Leyen noted at the summit that the trade relationship between the EU and China needs to become more balanced, as the EU’s trade deficit with China is growing. She emphasized that Europe welcomes competition, but it must be fair. Von der Leyen highlighted three key issues: excess production capacity, which doesn’t align with China’s domestic demand and affects the EU market; market access; and export controls on rare earth elements and permanent magnets. She warned that without progress on these issues, it would be very difficult for the EU to maintain its current level of market openness.

Chinese President Xi Jinping stated that Europe and China must make “correct strategic choices” amidst global challenges. He noted that the current challenges facing Europe do not originate from China. Xi Jinping urged the EU to pursue open cooperation and properly manage disagreements.

It was also noted that trade relations between the EU and China have reached an “inflection point,” as confirmed by comments made after the tense summit in Beijing. Von der Leyen stressed that the EU had “frankly and openly expressed its concerns about trade, investment, and geopolitical issues” and that “solutions were partially identified.” She mentioned that the Chinese leadership has begun to address the issue of overcapacity and expressed willingness to support increased consumption. She also affirmed that the EU’s relationship with China is “important, but it is independent of actions or issues we have with others.”

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Southeast Asia’s Balancing Act between the US and China

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With nearly 700 million people, Southeast Asia has found itself at the epicenter of a growing geopolitical rivalry between the United States and China. While the region’s leaders have traditionally sought to avoid choosing sides, shifts in the global order, particularly after the 2008-2009 financial crisis, have placed them squarely in the midst of this competition. Over the past 30 years, many countries have gravitated away from the United States and towards China, significantly harming US ambitions in Asia. The arrival of the Donald Trump administration radically altered US-China relations. Washington perceived Beijing as a strategic threat, a view reflected in the administration’s policies.

Trade agreements signed by the US in Asia, including with Vietnam, Indonesia, the Philippines, and Japan, are increasing pressure on China. Analysts state that Beijing is meticulously scrutinizing the minute details of bilateral agreements to prevent its economic interests from being undermined. While, the Trump administration’s tariffs, such as “Liberation Day” tariffs, cause misunderstanding and frustration among allies, the US remains an integral economic partner for countries in the region.

It’s noteworthy that the meeting between the Presidents of the United States and the Philippines, Donald Trump and Ferdinand Marcos Jr. took place on Tuesday, July 22, 2025, at the White House. The main topic of this meeting was a trade agreement, under which the U.S. would reduce tariffs for the Philippines to 19%, while in return, the Philippine market would be open for American goods. Discussions also touched upon relations with China, during which Marcos stated that the U.S. is their most important and  main partner and added that concerning China, the Philippines would exercise its right to self-defense, which underscores their independent foreign policy.

Chinese President Xi Jinping’s April visits to Vietnam, Malaysia, and Cambodia, against the backdrop of US tariffs, aimed to strengthen regional ties. During these visits, numerous agreements were signed in the trade, infrastructure, and technology sectors, an effort by China to present itself as a stable and long-term partner. Despite these diplomatic successes, China’s strategy has certain limitations, including financial caution and regional skepticism due to tensions in the South China Sea. A 2024 survey by the ISEAS–Yusof Ishak Institute revealed that while Southeast Asians view China as the most influential economic and strategic power in the region, they trust Japan, the US, and the EU more than China.

Southeast Asian countries like Vietnam, Malaysia, and Cambodia strive to maintain strategic autonomy and avoid entanglement in superpower rivalries. Vietnam, for example, firmly adheres to a non-aligned foreign policy to preserve economic stability. Cambodia, on the other hand, employs a “hedging” strategy to leverage China’s support while simultaneously protecting its own interests. Although the region is clearly leaning towards China, alliance patterns are not immutable, and countries can shift their orientation quite rapidly. This underscores the fact that Beijing still has much work to do to gain the trust of regional states and alleviate their concerns.

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Geopolitical Issues in US-China Trade Talks

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On July 21, US Treasury Secretary Scott Bessent stated that the Trump administration is in no rush to finalize a trade agreement with China, emphasizing that negotiations are still ongoing. Bessent also indicated that the talks may extend beyond tariff-related matters to include “other issues.”

Referring to these “other issues,” Bessent highlighted China’s cooperation with Iran and Russia. He noted that Beijing remains a significant purchaser of sanctioned Iranian and Russian oil, suggesting that these topics could also become part of the broader trade negotiations.

In response, Chinese Foreign Ministry spokesperson Guo Jiakun reiterated Beijing’s established stance on tariffs:

“We hope the US will work with China to implement the important consensus reached by the two heads of state during their phone call, make full use of the China-US economic and trade consultation mechanism, enhance mutual understanding through dialogue and communication, reduce misunderstandings, strengthen cooperation, and promote the stable, sound, and sustainable development of China-US relations.”

It is worth noting that, while the Trump administration has recently issued cautiously optimistic messages regarding trade negotiations, Chinese officials have maintained a more neutral tone. On July 18, Chinese Commerce Minister Wang Wentao stated that recent bilateral talks demonstrated there is “no need” for a tariff war between the two nations. He added that both parties now understand their mutual interdependence, as many of the goods and services they exchange are “irreplaceable.” Wang also underscored the burden imposed by the current US tariffs on Chinese goods, which stand at 53.6%.

Earlier, on July 17, Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, commented that recent US-China engagements have fostered high-level dialogue. He emphasized that the economic and trade consultation mechanism should serve to strengthen bilateral relations based on “equal attitude,” mutual „respect,” and a commitment to a “win-win” outcome.

Recent remarks by Chinese officials suggest that Beijing remains reluctant to make concessions in the ongoing tariff dispute. In this context, any attempt to expand the scope of trade negotiations to include China’s oil trade with Iran and Russia could further strain relations between the two countries.

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Tensions Between the U.S. and China Over Fentanyl

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On July 16, U.S. President Donald Trump signed the Halt All Lethal Trafficking of Fentanyl Act, also known as the HALT Fentanyl Act. The legislation addresses a growing crisis in American society: the rising rates of fentanyl trafficking and fentanyl-related deaths. In 2023 alone, fentanyl usage caused the deaths of 76,282 Americans. As such, combating this critical problem has become a key priority for the Trump administration.

However, the fentanyl issue has extended beyond domestic policy and has become a source of heightened tensions with China. In February 2025, President Trump imposed a 10% tariff on Chinese imports, citing China’s alleged role in facilitating the production and distribution of fentanyl. In a post published on the social media platform Truth Social, Trump claimed: “A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China.“

Following the signing of the HALT Fentanyl Act, Trump stated that China is currently paying the U.S. billions of dollars in tariffs to compensate for the damage caused by its involvement in the fentanyl trade. His remarks, however, also included a degree of optimism. He acknowledged that China is taking “big steps” to address the fentanyl issue and expressed confidence that “China is going to end up going from that to giving the death penalty to the people that create this.”

In response, Chinese Foreign Ministry spokesperson Lin Jian reiterated China’s longstanding position, stating that fentanyl is fundamentally an American issue and that the responsibility for it lies within the United States.

Lin criticized the imposition of fentanyl-related tariffs, arguing: “The U.S. has ignored China’s goodwill and insisted on imposing fentanyl tariffs on China, which severely undermines China-U.S. dialogue and cooperation on counternarcotics and significantly harms China’s interests. If the U.S. genuinely seeks to cooperate with China, it must acknowledge the objective facts and engage in dialogue on the basis of equality, mutual respect, and mutual benefit.”

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