The Impact of the Tariff War Intensifies, Authoritative Experts Interpret the "Room" for China's Macro Policies

Recently, the US government announced the imposition of "reciprocal tariffs," triggering turmoil in global financial markets.

In response, financial experts told Cailian Press that the current global political and economic landscape is undergoing profound changes, with increasing impacts of uncertainty. Regarding the room for China's macro policy adjustments, the experts emphasized that there is still space and capacity for China's macro policies, which will be dynamically adjusted based on the situation and external influences to strengthen counter-cyclical regulation.

The impact of uncertainty on monetary policy is deepening.

"The relationship between currency, inflation, growth, and employment is now more complex than ever. The policy adjustments of major central banks are increasingly data-dependent, making it difficult to linearly extrapolate the direction of macro-control policies as in the past," the experts told Cailian Press, noting that the impact of uncertainty on monetary policy is deepening.

The experts admitted that the severe fluctuations in financial markets caused by the tariff war, along with the complex interactions of international situations and economic policy adjustments in various countries, pose greater challenges to the formulation of monetary policies. The US Fed's monetary policy meeting concluded that the economy faces high uncertainty and needs to pause interest rate cuts. The European Central Bank believes that the trade war will have a "non-negligible" direct impact on the economy. The Bank of Japan stated that it will adopt a cautious wait-and-see approach, awaiting clearer direction in US tariff policies.

From China's perspective, the experts believe that fiscal policy has been proactive since the beginning of the year, and monetary policy continues to provide strong support. The current macro-control strategy has shifted to emphasize both consumption and investment, with a greater focus on consumption, all of which are supporting the accelerated recovery of domestic demand and driving sustained economic rebound.

"The current external environment is increasingly uncertain, with rising trade protectionism, and the spillover effects on China's economy also need to be observed," the experts said.

China has policy space and flexibility to cope with external uncertainties.

The experts further stated that since the beginning of the year, the fiscal deficit ratio has increased, government bond issuance has risen and accelerated, and the resolution of government debt has been steadily progressing, all supporting the continuous and effective implementation of more proactive fiscal policies.

On the monetary policy front, multiple RRR cuts and interest rate cuts in recent years have shown cumulative effects, maintaining ample market liquidity and keeping social financing costs at historically low levels, effectively creating a favorable monetary and financial environment.

"Since last year, the People's Bank of China has further promoted the transformation of the monetary policy framework, optimized intermediate targets of monetary policy, further improved the market-oriented interest rate regulation mechanism, clarified policy rates, and strengthened the implementation of interest rate policies. These measures help enhance the effectiveness of monetary policy regulation, adapt to the needs of economic structural transformation and high-quality development, and future monetary policy measures will continue to be effectively implemented," the experts said.

Additionally, market participants generally believe that China's macro policies still have ample space to effectively respond to changes in external uncertainties and maintain reasonable domestic economic growth.

The experts stated that China's economic growth has strong resilience, with a large and dynamic domestic market, and the industrial structure is continuously transforming towards high-end, intelligent, and green development. Cooperation with global economic development will continue to advance actively, "China has the ability to cope with external interference and risk shocks."