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Chinese President Xi Jinping arrived in Malaysia on Tuesday, April 15 for a highly anticipated state visit. With this move, Xi seeks to promote China as a reliable alternative to an escalating trade war with the United States.

Xi said he was “looking forward to … further deepening the traditional friendship” between China and Malaysia, CCTV, a Chinese state broadcaster, reported. He said he would “have an in-depth exchange of views” in meetings with Anwar and king Sultan Ibrahim, according to CCTV. “With the joint efforts of both sides, this visit will surely achieve fruitful results,” the broadcaster reported him as saying.

He and Anwar will witness the signing of a range of bilateral agreements, according to the Malaysian foreign ministry.

“China will work with Malaysia… to combat the undercurrents of geopolitical and camp-based confrontation, as well as the countercurrents of unilateralism and protectionism,” Xi wrote in an article for Malaysia’s The Star newspaper on Tuesday.

China has remained Malaysia’s largest trading partner for 16 consecutive years, with total trade between the two countries accounting for 16.8% of Malaysia’s global trade last year, according to the Malaysian Foreign Ministry.

Xi’s arrival came hot on the heels of his visit to Vietnam. The two nations said, “they will jointly oppose hegemony and power politics [and] jointly oppose unilateralism in all forms,” in a joint statement published Tuesday in Vietnamese state media after Xi’s visit.

China and Vietnam signed 45 cooperation agreements on Monday, April 14, including on supply chains, artificial intelligence, joint maritime patrols and railway development.

Xi said at a meeting with Vietnam’s top leader To Lam that their countries were “standing at the turning point of history … and should move forward with joined hands.”

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The White House said China is now facing up to a 245 percent tariff on imports to the U.S. "as a result of its retaliatory actions," another escalation in a trade war between the world's two largest economies.

The top potential tariff is higher than the previously stated 145 percent and was referenced in a fact sheet published by the White House late on Tuesday.

It accompanied an executive order signed by President Donald Trump that launched an investigation into the "national security risks posed by U.S. reliance on imported processed critical minerals and their derivative products."

Chinese foreign ministry spokesperson Lin Jian was asked about the 245 percent rate at a press briefing on Wednesday. "You can ask the U.S. side for the specific tax rate figures," Lin said, China News Network reported.

"This tariff war was initiated by the United States, and China's necessary countermeasures are to safeguard its legitimate rights and interests and international fairness and justice, which are completely reasonable and lawful."

Trump imposed a 10 percent tariff on imports from all countries. He has temporarily paused additional "reciprocal" rates set individually for each country depending on the trade barriers faced by the U.S. to allow time for negotiations on new deals.

The exception to that pause is China, which is facing increasingly higher tariffs from the U.S. and has responded in kind, among other countermeasures.

This week, China imposed more export controls on rare earths, which include materials used in high-tech products, aerospace manufacturing, and the defense sector.

Despite the eye-watering tariffs and tough rhetoric, both the U.S. and China have said they are open to talks on trade, though further tit-for-tat retaliation is likely in this conflict between two great powers.

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Malaysia stands with China on trade, Prime Minister Anwar Ibrahim has said as the Southeast Asian nation hosts Chinese President Xi Jinping.

“We stand with the Chinese government, for the well-being of our people and for our national economic interests, as well as the overall development and stability of our country,” Anwar told state-run Chinese broadcaster CGTN on Wednesday.

Xi, who is on a week-long three-nation tour of Southeast Asia, was greeted by a 21-gun salute as he arrived at the national palace on Wednesday morning for an audience with Malaysia’s King Sultan Ibrahim Iskandar, accompanied by Prime Minister Anwar.

Later, the countries are expected to sign deals aimed at opening up more trade for key Malaysian exports such as palm oil and durian, increasing the influx of Chinese tourists and students to Southeast Asia and sharing Chinese know-how in sectors such as renewable energy.

In return, analysts warn that China is likely to expect Malaysia and its Southeast Asian neighbours to back it as the region’s leading power – an alignment that could provoke a reaction from Washington, leading to unpredictable consequences.

Anwar, however, refuted this argument. “We should not and do not need to be constrained by any side. So far, we refuse to succumb to such pressure,” he said.

“Our attitude is that we cooperate with those who treat us well. I must emphasise that although China is a major power with a strong economy and formidable military strength, we have never felt any sense of trouble or pressure from it.”

The visit is timely as Malaysia and its neighbours face having their decades of growth stunted by Donald Trump’s tariffs.

The US president has threatened to impose a blanket 24 per cent tariff on Malaysian exports, affecting everything from electric heaters and lamps to furniture.

Xi’s visit, which was planned months in advance, comes as China assumes the role of the defender of global free trade after Trump’s tariffs threatened to cut access to the US market.

China’s giant economy has become a potential lifeline for Southeast Asian economies now fearing the gut punch of US tariffs.

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China’s President Xi Jinping has arrived in Malaysia as part of a Southeast Asian tour which is seen as delivering a personal message that Beijing is a more reliable trading partner than the United States amid a bruising trade war with Washington.

Xi’s three-country tour and his “message” that Beijing is Southeast Asia’s better friend than the truculent administration of US President Donald Trump comes as many countries in the 10-member Association of Southeast Asian Nations (ASEAN) bloc are unhappy with their treatment after the US imposed huge tariffs on countries around the world.

“This is a very significant visit. You can read many things into it,” said Mohamed Nazri Abdul Aziz, a former Malaysian ambassador to the US and minister of legal affairs.

“Under PM Anwar, Malaysia is getting very much closer [to China]. It’s a good thing,” he added, noting that “in the long run”, Washington’s “influence will be reduced”.

Washington hit Malaysia with a 24 percent trade tariff, accusing it of imposing a 47 percent tariff on US imports, a rate that Malaysian officials rejected.

Xi’s visit to Malaysia is in part an effort to “reinforce” the view that China can “offer to bypass America”, said James Chin, professor of Asian studies at the University of Tasmania in Australia, via a different international order such as BRICS – the 10-country intergovernmental organisation comprising Brazil, Russia, India and China, among others.

“Basically, this is all architectured to build a new international order… Trump has given China the excuse to push harder amongst countries around the world, especially developing countries,” Chin said.

Of the three countries Xi chose to visit this week, analysts said Malaysia is deemed to be the most important for China, given its sizeable 32 million population, its developing high-tech base and its current chairmanship of ASEAN. China is also Malaysia’s largest trading partner since 2009, and in 2024, China-Malaysia trade reached $212bn.

“China hopes to jack up trade with Malaysia, which will make up for the expected downgrading of exports to the US,” said Willy Wo-Lap Lam, a senior China analyst with the US-based Jamestown Foundation and author of the book, From Confucius to Xi Jinping.

“Politically, Malaysia has a lot of influence among all 10 ASEAN states,” Lam said. “Including how countries that have territorial disputes with China in the South China Sea should respond to Beijing’s aggressive tactics in bolstering its hold over.”

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Chinese electric vehicle (EV) maker Xpeng has ramped up development of its own artificial intelligence (AI) chip to power its semi-autonomous cars, with a first mass production model to be fitted with the Turing chip from as early as this quarter.

The chip, which is claimed to be more powerful than Nvidia’s Drive Orin X, would be used in all its production models as the EV maker promoted its cutting-edge technologies, CEO He Xiaopeng said in an interview. The chip could also power flying cars and robots being developed by its affiliated companies, he added.

Level of intelligence has become the new battleground for carmakers to overcome cutthroat competition in China. Xpeng’s Turing chip, designed for level 4 (L4) autonomous driving capabilities, was three times more powerful in computing power than Nvidia’s Drive Orin X installed in its existing smart vehicles, the CEO said in August.

At present, Xpeng’s cars such as the P7 sedan and G6 SUV can navigate their way automatically on mainland China’s highways and streets, but drivers are required to be fully alert with their hands on the wheel. They are deemed as semi-autonomous and categorised as L2+ vehicles.

L3 is considered a “hands-off” system, but still requires drivers to be responsible for safety and ready to take over, while L4 would allow drivers to take their eyes off the road in designated areas, according to standards set by US-based SAE International.

Tesla is the front runner in mainland China’s premium EV market segment. Xpeng, Shanghai-based Nio and Beijing-headquartered Li Auto are viewed as China’s best responses to the market leader.

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China and Vietnam signed dozens of cooperation agreements during a state visit by Chinese President Xi Jinping, as he aimed to strengthen ties in Southeast Asia on his first overseas trip of the year.

Vietnam is seeking to further strengthen cooperation with China in security, transport and securing preferential loans as well as technology transfers from China, VTV said. Hanoi also expects more balanced trade with its neighbor, it said.

Xi landed in Vietnam days after Donald Trump raised tariffs on China but gave everyone else — including Vietnam, which is negotiating over its 46% rate — a 90-day pause.

His regional tour, which will also see him visit Malaysia and Cambodia, highlights the tricky position Southeast Asian nations face. They’ve become key routes for Chinese exports to reach the US since Trump’s tariff hikes on Beijing in his first term.

Vietnam’s economy is heavily reliant on Chinese parts and raw materials, and the two sides are working to develop infrastructure to connect them more closely. China is Vietnam’s largest bilateral trade partner, with commerce totaling over $205 billion last year, and is a major market for Vietnam’s agricultural products from fruit to seafood, cashew nuts and coffee.

Vietnam’s government has vowed to speed up the progress of three railway projects connecting the two countries. This includes the $8.4 billion cross-border railway that will link the northern border city of Lao Cai to Hanoi and Haiphong port city.

Vietnamese Prime Minister Pham Minh Chinh said that aviation cooperation between Comac and Vietnamese partners has produced “increasingly positive outcomes,” after meeting the company’s chairman on Monday, according to a post on the government website.

Xi said at the meeting that China welcomes more trade with Vietnam and seeks increased cooperation in manufacturing and supply chains, as well technology including AI and semiconductor sectors, VTV said.

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China’s government said the US decision to exempt certain consumer electronics from its so-called reciprocal tariffs is a small step toward rectifying its wrongdoings and urged Washington to do more to revoke the levies.

President Donald Trump’s administration excluded smartphones, computers and other electronics from the increased import duties on Friday, narrowing the scope of his tariffs of 125% on goods from China and a baseline 10% on imports from most other countries.

“This is a small step by the US toward correcting its wrongful action of unilateral ‘reciprocal tariffs’”, the Ministry of Commerce said in a statement posted on its official WeChat account on Sunday. The ministry went on to urge the US to “take a big stride in completely abolishing the wrongful action, and return to the correct path of resolving differences through equal dialog based on mutual respect.”

Trump’s latest exemptions cover almost $390 billion in US imports based on official US 2024 trade statistics, including more than $101 billion from China, according to data compiled by Gerard DiPippo, associate director of the Rand China Research Center.

Trump on Saturday declined to elaborate on the exemptions beyond the published memoranda but hinted at further developments on Monday.

The move appeared to exclude the products from the 10% global baseline tariff on other countries, including Samsung Electronics Co.’s home of South Korea.

The tariff reprieve does not extend to a separate Trump levy on China — a 20% duty applied to pressure Beijing to crack down on fentanyl, including the shipment of precursor materials. Other previously existing levies, including those that predate Trump’s current term, also appear unaffected.

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Smartphones, computers, flash drives, semiconductors and solar cells will be exempt from the Trump administration’s wide-ranging tariffs on China and other nations, according to guidance from U.S Customs and Border Protection released late Friday night.

The policy is a boon to U.S. tech companies such as Apple, which produces most of iPhones in China.

Tech companies, and the net worth of their billionaire CEOs, were among those hardest hit when markets tanked on the tariff announcement. But, now Trump appears to be offering a helping hand by exempting some products from the 125 percent tariff he left on China.

A handful of tech stocks such as Apple, Microsoft, Nvidia, Netflix, Amazon, Meta and Google parent Alphabet make up over a quarter of the value of the S&P 500 at any given time — and all of these companies would face major financial challenges if global electronics supplies were hit with sustained tariffs.

The Friday announcement is the latest sudden adjustment in a tariff policy that’s changed every few days, after Trump announced on Wednesday a 90-day pause on a series of “reciprocal” tariffs on U.S. trading partners that rattled financial markets, while increasing tariffs on China to an effective rate of 145 percent and maintaining a baseline 10 percent tariffs on all countries that hadn’t retaliated against the U.S.

Despite attempting to soften the financial blow of the tariff agenda, some fear the policies have set the U.S. on a course for a recession.

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India is accelerating efforts to finalise free-trade agreements with Britain and the European Union by the end of the year, as it seeks to safeguard its economy against the ripple effects of US President Donald Trump’s latest tariff moves.

Analysts say New Delhi’s move to diversify its trade partnerships reflects a strategic shift to reduce reliance on the US market.

India was expected to adopt a measured approach in its negotiations with the United States, aiming to secure a trade agreement by September, said T.S. Vishwanath, principal adviser at international trade consultancy ASL-Legal.

At the same time, Delhi is working to expand its trade partnerships to cushion against any potential fallout from American policy shifts.

British businesses were informed during a call with negotiators this week that 90 per cent of the UK-India free-trade agreement had already been finalised, The Guardian reported. Remaining issues include tariffs on whisky, cars and pharmaceuticals.

In February, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen met in Delhi, where they expressed a shared determination to finalise the trade agreement. Von der Leyen was accompanied by a delegation of EU leaders, and discussions extended beyond trade to include defence and security partnerships.

“Partially, Trump’s tariffs have created urgency around diversification, encouraging quicker deal-making between global powers,” said Chris Blackburn, an independent UK-based political commentator.

One major sticking point in the India-EU talks is the EU’s planned implementation of a carbon border adjustment mechanism starting next year. This policy would impose charges on carbon-intensive goods, posing challenges for India, which still relies heavily on coal and fossil fuels to meet its energy needs despite making great strides in renewable energy capacity.

Climate experts are hopeful for a compromise, however, noting both sides’ commitments to net-zero goals. They suggest that collaboration could extend into renewable energy and the development of environmentally friendly technologies.

If Washington’s trade policies persist, other key sectors – including aerospace, industrial machinery, pharmaceuticals, luxury goods, and agricultural products such as cheese, wine and olive oil – could face greater exposure to trade uncertainties.

“This pressure is pushing them to diversify,” Blackburn said. “Countries have hedged between East and West for decades. The East could win. It’s a high-stakes gamble by Trump.”

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China retaliated against Donald Trump’s latest tariffs by hiking duties on all US goods, while calling the administration’s actions a “joke” and saying it no longer considers them worth matching.

Beijing will raise tariffs on all US goods from 84% to 125% starting April 12, the Ministry of Finance said on Friday, after the White House clarified that levies on Chinese goods rose to 145% this year.

“Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinese exports, China will disregard such measures,” according to the statement.

However, China warned that it will “resolutely counterattack and fight to the end” if the US continues to infringe on its rights and interests. It also said America should take full responsibility for the damage caused by the tariffs.

Tensions between Beijing and Washington have spiraled beyond tit-for-tat tariff exchanges in recent days to impact services and people-to-people ties. Chinese authorities on Thursday moved to cut the number of American films allowed in theaters. Officials also warned citizens against traveling to the US and cautioned students about security risks in “certain states.”

The US and China now trade about $700 billion worth of goods each year. Without a deal to ease tensions, the higher tariffs will mean consumers and businesses on both sides are likely to face rising costs, as they scramble to adjust supply chains and reduce their tariff exposure.

So far, China has refused to cave to Trump’s pressure even as soaring duties are expected to weigh on the economy, with Goldman Sachs Group Inc. economists cutting their 2025 growth forecast to 4% from 4.5%.

President Xi Jinping on Friday made his first public remarks on the escalating trade war, saying China remains confident and unafraid of any “unjustified suppression.”

“One that goes against the world risks being isolated themselves,” Xi told visiting Spanish Prime Minister Pedro Sanchez.

Reaffirming China’s stance that there are no winners in a tariff war, Xi added that the country’s development has never relied on the goodwill of others. “No matter how the external environment changes, China will stay confident, remain calm, and focus on managing its own affairs,” he said.

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On Thursday morning in Shanghai, as shoppers filled the luxury malls and delivery drivers whizzed around the winding streets at breakneck speed, financiers breathed a cautious sigh of relief. Overnight, US President Donald Trump had reversed course, announcing a 90-day pause on his so-called “reciprocal tariffs” of up to 50% for dozens of countries. Although China got no such reprieve – instead, the levy on Chinese goods was increased to 145% – the temporary return of normal trade channels showed Chinese businesspeople that all was not lost.

Since 2017, thanks to tariffs on Chinese goods, the share of China’s exports bound for the US has dropped from about 20% to less than 15%. But much of that trade has simply been re-routed through third countries, as Chinese firms set up shop in places with cheaper labour costs and easier access to the US market.

Hobbling those countries’ ability to export to the US would inflict more true economic pain on Chinese companies than bilateral tariffs ever could. So in Shanghai, China’s commercial capital, a return to a narrowly US-China trade war, while still unwelcome, is some comfort.

But on the ideological front, the mood in China is hardening over Trump’s imposition of 145% tariffs. State media and the foreign ministry have been sharing a clip of the former US president Ronald Reagan decrying tariffs in 1987. On X, foreign ministry spokesperson Mao Ning has been trolling the US, posting a meme of a Make America Great Again baseball cap increasing in price from $50 to $77.

The most telling propaganda has been the resurfacing of a video clip of former Chinese leader Mao Zedong from 1953. “As to how long this war will last, we are not the ones who can decide,” Mao says. “No matter how long this war is going to last, we will never yield,” he says to applause.

Ren Yi, an influential commentator who writes under the name Chairman Rabbit, wrote on Thursday: “The trade war is a war of public opinion, public sentiment, and information … China should adopt a ‘wartime’ state of tension in terms of public opinion, and all sectors should move in one direction and one goal. This issue is by no means a joke.”

There is an ominous sense that the US-China relationship could still get worse. On Thursday, in a largely symbolic move, China said it would restrict the import of Hollywood movies. China’s tariffs of 84% on US goods have come into effect. Six US companies have been added to Beijing’s list of “unreliable entities”, restricting their ability to do business in China.

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