Beijing: China’s tariffs on U.S. President Donald Trump’s exports to China on Wednesday, levying 84% of its imports from the United States, exacerbating a trade war between the world’s top two economies. The tax hikes were as high as 34% after Trump’s explosive new tariffs on 60 countries, including 104% of China, effective after midnight Wednesday U.S. time.
Trump’s threat to China on Monday’s additional 50% tariffs was after Beijing refused to withdraw 34% tariffs on U.S. goods by Tuesday, announcing that it would impose a 34% tax on Chinese goods announced last week.
China will impose additional tariffs on products imported from the U.S. on Thursday until 84% goes into effect.
The announcement comes after the U.S. decided to raise reciprocal tariffs on Chinese imports from 34% to 84%, a move that “is on the wrong path and seriously infringes on China’s legitimate rights and interests.”
After the latest U.S. tariff hike, China filed a lawsuit through the World Trade Organization’s (WTO) dispute settlement mechanism.
A spokesman for the Commerce Department said other U.S. tariff measures seriously violated WTO rules, responding to U.S. additional tariff announcements on Chinese goods rather than early reciprocity tariffs.
The spokesman said the imposition of an additional 50% tariff was a serious mistake in existence and highlighted the unilateral bullying nature of the U.S. action.
In addition, the country’s Commerce Department announced on Wednesday that China added six U.S. companies to its list of unreliable entities.
In recent years, these companies have participated in arms sales to Taiwan, or carried out so-called military and technological cooperation with Taiwan, seriously undermining China’s national sovereignty, security and development interests.
China also added 12 companies to its export control list, the ministry said, adding that the companies engaged in activities that could endanger China’s national security and interests.
Meanwhile, the Information Office of China’s State Council on Wednesday released a white paper titled “China’s Position on China-US Economic and Trade Relations Issues”, saying that “the rise of unilateralism and protectionism in the United States has greatly hindered normal economic and trade cooperation between the two countries,” according to the New China National Congress. ”
“These measures – which reveal the isolationist and compulsory nature of American behavior – contrary to the principles of market economy and multilateralism, trade novels imposed by both countries and the United States from time to time with tariffs imposed by the United States from time to time and will have a serious impact on China’s economic and trade relations.”
The white paper said the reciprocal tariffs imposed by the United States on the United States would harm its own and others, adding that it was a serious violation of WTO rules, harming the multilateral trading system and eroding the legitimate rights and interests of affected parties.
As two major countries at different stages of development in different economic systems, “it is natural to have differences and frictions in economic and trade cooperation between China and the United States.” “It is crucial to respect each other’s core interests and major issues and find appropriate solutions to solve the problem through dialogue and consultation.”
New tariffs from both sides will reach about $575 billion in bilateral trade, with China exporting $430 billion to the United States. Official data show that the U.S. trade deficit with China totaled $295.4 billion last year.
Trump’s 104% tax on China is the highest of all countries that have imposed new tariffs on him since he took over as a new term in January.
For China, the United States is the third largest export market. Although China is on the brave front, there is a lot of concern here about the impact of Trump’s tariffs on the Chinese economy, which is working on the impact of the Chinese economy due to declines in exports, low domestic consumption rates and collapse of housing markets.
According to analysts, China is trying to reassign its dependence to a domestic consumption-driven economy, which accounts for 38% of GDP, compared with 60% to 70% in Western countries.
Larry Hu, chief Chinese economist at investment bank Macquarie, estimates that Trump’s latest tariffs could reduce China’s export points by 15 percentage points, while its GDP growth rate fell by 2-2.5 percentage points.
“This impact could be manifested through multiple channels, such as a drop in U.S. demand for Chinese goods, potential global economic slowdowns and a blow to the rearrangement of exports,” HU wrote in a research note on Monday.
The People’s Bank of China (PBOC) on Wednesday supported Trump’s huge tariffs, further weakening the yuan, providing better returns to global exports at a daily fixed rate (also known as the midpoint rate) at a daily price of $7.2066.
On Tuesday, Chinese Prime Minister Li Qiang exuded confidence that China had “enough policy tools” and “full ability to resist external shocks”, apparently suggesting Trump’s tariffs.
Lee told European Commission President Ursula von der Leyen during a telephone conversation that “China has taken resolute measures not only to protect its sovereignty, security and development interests, but also to defend international trade rules, international fairness and justice.”
Li said China’s macro-policy this year has fully considered various uncertainties and has sufficient policy tools to hedge external impacts, adding that China is confident in maintaining a sustained and healthy economic development.
