China has enacted new tariffs on American goods starting Monday, marking the latest development in the intensifying trade conflict between the world’s two largest economies. This move comes in response to new U.S. levies announced by President Donald Trump, who on the same day declared a 25% tariff on all steel and aluminum imports, signaling a broadening scope of trade barriers.
The reciprocal measures by Beijing were prompted by the U.S. imposing a 10% tariff on all Chinese products, which took effect immediately after being announced on February 4. President Trump, speaking to reporters aboard Air Force One, hinted at further tariffs on other nations, though specifics were not provided.
In addition to these measures, China has tightened controls on the export of 25 rare metals critical to the manufacture of electronic and military equipment, potentially deepening the impact of its retaliatory stance.
During his presidency, Trump has consistently employed tariffs as a tool to address trade imbalances, previously imposing 25% tariffs on steel and 10% on aluminum during his first term, albeit with exemptions for certain countries like Canada, Mexico, and Brazil. These initial tariffs had been lifted by the time President Joe Biden took office, resolving ongoing tariff disputes with the European Union.
However, Trump’s latest announcements include plans for potentially broader reciprocal tariffs, aligning with his longstanding campaign promise to match foreign tariffs on U.S. goods. Additionally, he mentioned ongoing considerations regarding tariffs on vehicle imports, despite potential exemptions.
This ongoing trade spat has seen accusations from both sides, with Beijing recently challenging the U.S. at the World Trade Organization (WTO) over what it deems “discriminatory and protectionist” practices, particularly concerning the trade of synthetic opioids like fentanyl. Yet, the effectiveness of this challenge remains uncertain, as the WTO’s dispute resolution body is currently non-functional.
The tension between the U.S. and China extends beyond tariffs, with disrupted logistics such as the temporary cessation of Chinese package deliveries by the U.S. Postal Service following the new tariffs, although this was quickly reversed.
As these trade disputes continue to unfold, the global economic landscape remains watchful of the long-term implications of these ongoing tensions between the two economic powerhouses.