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China’s retaliatory import taxes on specific American goods went into effect on Monday, escalating the ongoing trade war between the world’s two largest economies. Beijing’s measures follow the implementation of new US tariffs of 10% on all Chinese products on February 4.
China’s Response to US Tariffs
China levied a series of border taxes: a 15% duty on US coal and liquefied natural gas, a 10% tariff on American crude oil, agricultural machinery, and large-engine cars. These actions are part of China’s strategy to counterbalance US trade policies.
Trump Expands Tariff Plans
On Sunday, President Donald Trump announced he intends to impose a 25% levy on all steel and aluminum imports into the US, with detailed measures expected to be outlined on Monday. Trump also hinted at reciprocal tariffs on other nations but hasn’t specified the targets.
Trump’s decision comes amidst earlier agreements with Canada and Mexico to avoid the 25% tariffs on all imports. These deals were reached after he implemented similar measures during his first term, including duty-free quotas for key trading partners.
欧盟 and Technological Measures
The unresolved EU tariffs from Trump’s first term were addressed by the Biden administration. Meanwhile, Chinese authorities launched an anti-monopoly investigation into tech giant Google and added US company PVH, owner of brands like Calvin Klein and Tommy Hilfiger, to its “unreliable entity” list.
China also introduced export controls on 25 rare metals, some crucial for electronics and military equipment, intensifying the trade tension.
China’s WTO Complaint
The day following the latest US tariffs, China lodged a complaint with the World Trade Organization (WTO), alleging US import taxes were discriminatory and protectionist. China argued that the US tariffs violated trade rules, particularly those concerning synthetic opioids like fentanyl.
However, experts caution that China faces a challenging path to a favorable WTO ruling due to the current non-functional state of the organization’s dispute settlement panels.
Preparedness and Negotiations
“China is much better prepared compared to Trump’s first term,” observed Scott Kennedy, an expert in Chinese business and economics at the Center for Strategic and International Studies. Despite slowing in certain sectors, China boasts advanced technology capabilities and a diversified trade network.
Trump had been anticipated to discuss trade issues with Chinese President Xi Jinping recently but indicated no urgency for immediate talks.
Recent Changes in US Tariffs
On Friday, Trump suspended tariffs on small mail packages from China, which were set to 10% on February 4. The suspension will last until systems are established to manage and collect the tariff revenue effectively.
The US Postal Service briefly halted accepting packages from China, only to reverse its decision the following day. The suspension aims to mitigate the disruption caused by the additional tariffs.
Global Trade Implications
The escalating trade war has broad implications for global economies, affecting supply chains, market dynamics, and consumer prices. Countries and businesses are closely monitoring Trump’s actions, especially regarding potential tariffs on the EU, to gauge the full extent of his protectionist policies.
Experts believe that the ongoing tension could lead to a more fragmented global market, where nations form alliances to protect their interests against perceived unfair trade practices.
Conclusion
The trade dispute between the US and China continues to heat up, with both nations taking strategic actions to protect their respective economies. The proposed massive tariffs on steel and aluminum from Trump and the retaliatory measures by China highlight the complex and volatile nature of international trade relations.
As the situation evolves, stakeholders are keenly observing how relations between key global players will unfold. The ultimate impact on the world economy remains to be seen.
If you have insights or opinions on this developing trade war, we encourage you to share them below.
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