Tariff policy plays a key role in China’s economic development and in shaping its global trade position. China’s accession to the WTO in 2001 accelerated its integration into the global economic system, marking a shift from a predominantly closed trade model to a more liberalized one. By 2010, China had fulfilled all its commitments to reduce tariffs, lowering the average import tariff rate from 15.3% to 9.8%. By 2015, the trade-weighted average reached 4.4%, approaching the levels of developed economies such as the United States and the European Union. However, China still retains room for selectively protecting its domestic industries.
Mechanisms for Formulating Tariff Policy
Within the current structure of tariff policy, China continues to use tariffs as a tool for targeted intervention. The adoption of tariff decisions in China is embedded in a centralized governance model. In addition to the State Council, the Tariff Commission under the Ministry of Finance, and the Ministry of Commerce, significant influence is exerted by party structures—primarily the Central Financial and Economic Affairs Commission of the Communist Party of China (CPC Central Committee)—as well as sectoral working groups that coordinate development priorities. The development of tariff measures takes place within the framework of five-year plans, in which sectoral priorities and parameters for permissible foreign economic adaptation are defined through a mechanism of party-level filtering.
Lobbying structures such as the China Association of Automobile Manufacturers (CAAM), the China Photovoltaic Industry Association (CPIA), and large state-owned corporations play a particularly important role. These entities can influence tariff regulation parameters through expert councils and party channels. Unlike in the West, however, lobbying in China is institutionalized not through public pressure but through a system of interdepartmental coordination, which ensures flexibility and coherence in political-economic planning.
For example, reduced or zero tariff rates are applied to high-tech products and equipment, while a system of tariff quotas is used for sensitive categories of goods, allowing control over import volumes and prices. This provides strategic protection for key industries while maintaining overall market openness.
Sector-Specific Cases of Tariff Regulation
In the automotive industry, China maintained a 25% import duty for a long time (while most Free Trade Agreements applied rates ranging from 0 to 10%). In July 2018, however, the tariff was reduced to 15%, and to 6% for auto parts, accompanied by stricter local safety and environmental standards.
More than $100 billion was allocated to the electric vehicle (EV) sector between 2016 and 2022, enabling Chinese EVs to capture over 30% of the global market by 2023. This triggered concern in the European Union, which in 2024 announced countervailing measures against Chinese electric vehicles. In response, Beijing initiated investigations into imports of European products.
In the solar energy sector, Chinese companies have taken leading positions in the global market, accounting for over 80% of photovoltaic module production. This has helped expand access to renewable energy sources in developing countries across Asia and Africa. At the same time, it triggered retaliatory measures from the EU and the United States. In 2024, the European Commission launched an investigation into new Chinese solar projects, while the U.S. imposed anti-dumping duties on Chinese solar panels.
In the agribusiness sector, tariff regulation on grain crops (up to 65%) is combined with a flexible import policy. As domestic demand has increased, China has ramped up imports of soybeans and corn from abroad. In response to U.S. trade restrictions, additional tariffs of 34% were introduced in 2025, followed by a shift toward alternative suppliers in Latin America.
Non-Tariff Instruments and Hidden Protectionist Policies
Non-tariff measures—including quotas, technical regulations, and sanitary standards—play a key role in controlling imports. A clear example is tariff quotas applied to grain, sugar, rice, cotton, and fertilizers, under which a preferential rate is used within the quota, while a significantly higher rate (up to 65%) is applied beyond it. This effectively limits import volumes.
The quota allocation process has drawn criticism from trade partners, particularly the United States, due to its lack of transparency and limited access. This concern was also confirmed by the WTO in 2019. However, China views these measures as necessary to ensure food security without directly violating its WTO commitments.
The Role of “Hidden Tariffs”
Sanitary, technical, and administrative regulations continue to function as “hidden tariffs,” restricting access for foreign products without formally increasing duties, despite the official elimination of most non-tariff barriers in 2005. For certain categories of goods, mandatory certification under national standards (GB, China’s version of GOST) is required, and exports to China are limited to a list of registered suppliers. These measures complicate import procedures and create a regime of restricted market access, effectively offsetting the reduction in tariff burdens through institutional barriers.
State Subsidies as a Key Element of Non-Tariff Regulation
State subsidies remain a powerful element of non-tariff regulation, amounting annually to 1.5–2% of China’s GDP. Through direct funding, tax incentives, preferential loans, and hidden forms of support, Beijing creates conditions under which production costs decrease, giving Chinese exports characteristics of dumping.
In response to the subsidization of Chinese products, numerous countervailing and anti-dumping measures have been imposed against China. In turn, the Ministry of Commerce of the PRC has launched reciprocal actions. In 2025, it initiated an investigation into U.S. subsidies for semiconductors, citing dumping and unfair competition, and imposed countervailing duties of up to 75% on key export categories used in electronics and auto parts.
These measures reflect Beijing’s effort to build a balanced trade policy—one that accounts for the need for international cooperation while protecting domestic industries.
China’s Role in the Global Tariff Regulation System
As part of its trade integration strategy, China actively utilizes mechanisms of multilateral agreements. In 2020, it signed the Regional Comprehensive Economic Partnership (RCEP) with 15 Asia-Pacific countries, which came into effect in January 2022. The agreement envisions eliminating up to 90% of tariffs over a 20-year period.
This agreement led to the creation of the world’s largest free trade area, covering about 30% of global GDP and exports. It also marked the first trade agreement to establish preferential trade relations between China and Japan.
China’s Expanding Network of Trade Agreements
In parallel, China is expanding its network of bilateral free trade agreements and is making efforts to join other international trade blocs. In 2021, China applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), viewing it as part of deepening economic integration amid growing geoeconomic turbulence.
A key strategic focus remains the creation of a resilient foreign trade system, with priority given to Asia and developing countries. This is reflected in statements by China’s Ministry of Commerce regarding plans to conclude new agreements aimed at strengthening the global network of free trade areas.
China’s Level of Tariff Openness in Comparison
To illustrate China’s level of tariff openness, it can be compared with major trade centers and emerging powers. According to WTO data, the trade-weighted average import tariff for China is approximately 7.5%, which is half the level it was in 2001 (15.3%).
Table 1. Comparison of Tariff Openness by Country
| Country | Average Import Tariff (%) |
| China | 7.5 |
| European Union | 5.1 |
| United States | 3.8 |
| India | 15.9 |
| Vietnam | 9.4 |
Unlike the United States (3.8%), where tariff policy is characterized by regulatory rigidity and focused on punitive tariffs—such as those targeting Huawei and BYD—as a tool of foreign policy under the “America First” doctrine, China integrates tariff measures into long-term strategic planning, emphasizing institutional responses and diplomatic channels.
Meanwhile, in the European Union, tariff rates are moderate (5.1%) but are complemented by a dense array of environmental, technical, and sustainability regulations (ranging from CBAM to anti-dumping investigations on Chinese exports of steel, cement, and aluminium). In response, China employs parallel access mechanisms, including the localization of standards and certifications.
India and Vietnam in the Context of China’s Tariff Strategy
India, by contrast, pursues a high-tariff policy (15.9%) as part of its push for self-reliance, creating competition with China in developing markets. Vietnam (9.4%) maintains openness but remains economically tied to China through free trade agreements, limiting its autonomy.
In addition to competing with developed countries, China actively engages with developing markets, where its trade policy generates mixed effects. Affordable Chinese products contribute to increased consumption and economic growth, especially in Africa and Asia. A notable example of adaptive engagement with China is Kazakhstan, which, while maintaining a strategic partnership, actively leverages the opportunities arising from tariff transformation.
Under the Framework Agreement between the EAEU and China, and the Belt and Road Initiative (BRI), Kazakhstan has expanded its access to the Chinese market. Furthermore, 27% of Chinese cargo headed to Europe transits through Kazakhstan, enhancing its role in Eurasian logistics.
Global Impact and Strategic Adaptability of China’s Trade Policy
On the other hand, competition with subsidized Chinese goods undermines the position of local producers and increases dependence on Chinese demand and tariffs. A clear example is the redirection of soybean export flows from the U.S. to Brazil and Argentina after China imposed tariffs—demonstrating Beijing’s influence over global agricultural markets.
At the same time, many developing countries fear the dominance of cheap Chinese products and introduce their own tariffs on industrial goods, recognizing that overly rapid liberalization could harm their domestic industries.
Overall, China demonstrates a willingness to cooperate by expanding duty-free access for goods from the least developed countries and signing new free trade agreements with neighbouring states—highlighting China’s strategic adaptability amid intense regulatory competition.
Geo-Economic Confrontation: China and the United States
Undoubtedly, a key vector of China’s current trade policy is its increasing geopolitical orientation. Despite its commitment to WTO principles, Beijing faces growing criticism from the United States and the European Union. Since 2018, trade tensions between China and the U.S. have escalated into a phase of strategic rivalry, where tariffs have become instruments of political and economic pressure. By 2020, the U.S. had imposed tariffs on more than 66% of Chinese exports, with rates reaching up to 25%, while China responded with tariffs on 70% of imports from the U.S.
Against this backdrop, in 2024–2025 Beijing intensified its strategy of foreign economic reorientation, increasing imports from Southeast Asia and Latin America, and expanding export support mechanisms and aid for strategic industries. This triggered new countervailing investigations from the U.S. and the EU. Simultaneously, Brussels and Washington ramped up their monitoring of Chinese subsidies, while China introduced new export and investment incentives in “green” sectors, further escalating the risk of confrontation.
A Temporary Attempt at Stabilization
An attempt at temporary stabilization came through negotiations held in May 2025 in Geneva, during which the parties agreed to a partial 90-day freeze on mutual tariffs. Specifically, the U.S. reduced tariffs from 145% to 30%, while China lowered its tariffs from 125% to 10% (although the most severe “political” tariffs remained in place).
At the same time, Beijing intensified its multilateral diplomatic efforts. In April, China’s Minister of Commerce, Wang Wentao, held a video call with WTO Director-General Ngozi Okonjo-Iweala, during which both sides emphasized the need for collective action against unilateral protectionism and for the defence of the foundations of the multilateral trading system.
Nevertheless, despite this partial de-escalation, fundamental disagreements remain unresolved, and tariff policy continues to be viewed as a tool in the global competition for leadership in world trade.
Global Challenges and the Risks of Trade Fragmentation
China’s current tariff policy faces the challenges of increasing politicization and trade fragmentation. First, tariff measures are increasingly adopted in response to geopolitical factors, reducing their predictability and heightening strategic uncertainty. Against the backdrop of WTO stagnation and the growing role of free trade agreements, this complicates long-term planning and undermines trust among investors and trade partners.
Second, China faces the risk of losing its position as a universal export hub amid the global shift toward regionalized trade models—particularly with the growing practice of “friend-shoring”—as well as the tightening of trade barriers by the EU and the U.S., which restrict Chinese goods’ access to developed markets.
Third, there is a growing trend toward the use of trade restrictions based on political considerations, which further reduces the predictability of the external environment. Initiatives such as the EU’s “anti-coercion instrument” and U.S. sanctions targeting high-tech exports from China are shaping a practice of unilateral regulation that bypasses multilateral frameworks. This contributes to rising reputational and contractual risks—even from traditionally neutral partners.
Prospects for Adapting China’s Tariff Policy
Amid increasing regionalization and politicization of global trade, it is especially important for China to develop a balanced approach that combines the protection of national interests with the maintenance of external economic openness.
In particular, the accelerated advancement of China’s application to join the CPTPP, along with the expansion of its network of bilateral free trade agreements with developing regions, not only helps diversify trade flows but also reduces China’s vulnerability to restrictive measures from its partners. At the same time, strengthening dialogue with the EU and the U.S. creates opportunities for harmonizing approaches and reducing regulatory pressure.
In addition, institutionalizing information transparency could play a key role in shaping China’s pragmatic image as a responsible participant in global trade—one focused on stability, mutual benefit, and institutional compatibility. A potential step in this direction could be the regular publication of white papers on trade policy and the strengthening of expert platforms to evaluate tariff initiatives. This would enhance the transparency of decision-making and build greater trust among international partners.
Thus, China’s tariff policy is in a phase of adaptation to new conditions marked by intensifying geo-economic competition, increasing complexity in trade rules, and the growing politicization of foreign economic relations. In this context, institutional flexibility, transparency of decisions, and a strengthened role for Beijing in shaping a stable international trade environment become key priorities.
China Studies Centre
