High Tariffs Set to Return: Center for Globalization Hong Kong Unveils 90-Day Transformation Path for Chinese Enterprises

As the Joint Statement on U.S.-China in Geneva ushered in a temporary easing of trade tensions, the Center for Globalization Hong Kong (CGHK), an emerging think tank based in Hong Kong, released a forward-looking analysis of the U.S.-China trade war’s likely trajectory. Through in-depth research and strategic evaluation, the CGHK outlined the impacts of progress across various negotiation phases (90–180 days) on Chinese enterprises, offering strategic pathways and actionable recommendations tailored to different types of businesses. The findings were presented in the report "The Transformation Path for Chinese Enterprises Amid the U.S.-China Trade War," officially released at the Breakthrough & Regeneration: Corporate and Social Decision-Making in a Global Shift and AI Revolution Mid-Year Forum hosted by the Peter Qiu Club on May 17.

Trade Negotiation Window: Trump’s True Intentions

While the recent joint statement included mutual tariff reductions on select goods—the first reciprocal concession since this round of trade tensions began—removing retaliatory tariffs alone does little to resolve the core conflicts. The underlying trade imbalance and structural differences between China and the U.S. remain unresolved. U.S. Treasury Secretary Bessent stated in a recent interview that the U.S. would accelerate its “ ‘big, beautiful’ economic rebalancing,” aiming to achieve supply chain independence in key sectors and deepen cooperation with allies. This indicates that the trend of U.S.-China decoupling in critical supply chains will likely continue.

According to the Center for Globalization Hong Kong, Trump’s renewed tariff strategy is driven by at least three main objectives: (1) reducing the U.S.-China trade deficit, (2) encouraging reshoring of manufacturing to the U.S., and (3) restructuring American competitiveness with national security at its core. Structural tensions between the two nations are unlikely to ease—in fact, they may intensify amid the ongoing global reordering spurred by the trade war.

90–180 Days: Difficult Talks and Potential Reversals

During the 90-day buffer period, the two sides will engage in more complex strategic competition. The report anticipated a “three-step” negotiation process focused on structural and systemic issues.

• Phase One (approx. 30 days): The goal is to establish dialogue mechanisms and define the scope of talks. Topics will likely include tariff frameworks, non-tariff barrier lists, and fentanyl issues. However, both sides are expected to draw firm red lines—China will not entertain discussions involving its political system or national security, while the U.S. will insist on preserving its financial leadership and push forward on decoupling in key tech sectors.
• Phase Two will dive into deep structural issues. While there could be some progress on fentanyl-related tariffs under rational dialogue, U.S. accusations around "overcapacity" and subsidies will remain contentious, with little room for consensus on financial and monetary matters. If the U.S. potentially concludes agreements with other major trade partners and completes its own preparations, Trump may feel emboldened to reinstate or raise tariffs on China—possibly up to 54% or more. The two sides could enter a prolonged “negotiation amid confrontation” model.
• Phase Three may see both sides recognizing the domestic fallout of continued standoff. Ideally, they might opt for a “time-for-space” approach—extending cooperation in select areas while preparing for eventual decoupling. However, a more likely scenario is a long-term cycle of “pressure–negotiation–partial concessions,” with no enduring agreement in sight.

Three Strategic Pillars for Enterprise Transformation

For Chinese companies, the trade war and associated uncertainties have created immense operational risks. The ongoing reshaping of global trade, economic, and political orders compels businesses to act swiftly. The Center for Globalization Hong Kong emphasized that during the 90-day buffer period—or any extended grace period—the top priority for Chinese enterprises, particularly those hit hardest by the trade war, should be to secure exports and orders quickly, expedite deliveries, and realize profits. Over-optimism must be avoided, and blind production expansion should be resisted. Swift transformation during this window is essential.

The report identified three core strategic levers to drive transformation:

1. Global Geopolitical Vision
2. Technology Empowerment
3. Collaborative Innovation

These form the foundation for Chinese enterprises to seize future opportunities amid uncertainty and achieve high-quality growth.

Targeted Tactical Recommendations

The report proposed six universal strategies for transformation, while offering differentiated “combo strategies” based on enterprise types: export-oriented, cross-border commerce, and domestic demand-driven.

Export-Oriented Enterprises Primarily Serving the U.S.: Diversification + Technology Empowerment

For manufacturers most directly impacted by the trade war, the CGHK recommends the “regional hub strategy” to achieve indirect access to the U.S. market through global reconfiguration. Countries like Canada, Mexico, and Vietnam remain valuable considering tariff advantages and resilience. The Middle East (e.g., Saudi Arabia, UAE) also offers strategic policy incentives and access to U.S. and European markets.

Service enterprises should focus on building regional delivery centers, data centers, and customer support centers, choosing data-friendly, legally stable countries such as Singapore, Ireland, Dubai, and Mexico. These “virtual hubs” enable uninterrupted remote service for U.S. clients. Companies should also leverage AI empowerment, focusing on platform innovation and foundational capability building. Priority areas include computing power, algorithms, data security, and international standards, with the goal of strengthening R&D and unlocking outbound growth, supported by national innovation funds.

Cross-Border Businesses Focused on the U.S.: Time Optimization + Risk Reduction

Despite the easing of some tariffs, non-tariff barriers remain a high-pressure grey zone. Platform policies, payment channels, and data scrutiny are not yet part of any negotiation list. Businesses heavily reliant on the U.S. should not mistake improved sentiment for regulatory loosening.

The CGHK advised such businesses to:

• Act fast: Secure channels, expedite exports, complete compliance filings;
• Simplify operations: Lower exposure, diversify channels, reduce identifiable risks, and shift markets;
• Maximize exemptions: Capture tariff exemption opportunities and optimize cross-border e-commerce strategies.

The report also offered practical suggestions for:

• Export-oriented firms not focused on the U.S.;
• Cross-border enterprises with diverse markets;
• Domestically driven sectors including agriculture, manufacturing, and services.

The goal is to inspire business leaders and industry professionals with actionable strategies and thoughtful insights to guide enterprise transformation.

Beyond the report, the Breakthrough & Regeneration Mid-Year Forum by the Peter Qiu Club brought together leaders from politics, business, and academia to explore how global disruption and the AI revolution are reshaping decisions at every level. The forum provided thought leadership for those navigating transformation and invited all to follow the event or join the Peter Qiu Club.