Beijing:
China has returned against US President Donald Trump’s “Liberation Day” tariff, slapping 34 percent of the levy on all imports of American goods.
AFP sees how a growing trade war between the United States and China is playing – and what effect it can have.
Why is China so insecure for tariffs?
Trade between the world’s two largest economies is vast.
According to Beijing’s customs data, the sale of Chinese goods to the United States last year was more than $ 500 billion – 16.4 percent of the country’s exports.
According to the US Trade Representative’s office, China imported $ 143.5 billion from the United States in 2024.
According to the Bureau of Economic Analysis of the US Commerce Department, China has long attracted Trump’s trade with a trade surplus with the United States with a trade surplus that reached $ 295.4 billion last year.
Beijing leaders have been reluctant to disrupt the status quo, in the part because China’s export-operated economy is particularly sensitive to wiksitude in international trade.
American duties also threatened to harm China’s fragile economic reform as it struggles with a long-running debt crisis in the property sector and continuously consumed low consumption-a recession Beijing last year demanded to slow down with widespread fiscal stimulation.
But an acute trade war will mean that China cannot reduce its expectations for strong economic growth this year on its exports, which reached a record height in 2024.
“The US tariffs on the Chinese imports so far this year can deny the lift from fiscal stimulation measures declared so far this year,” HSBC’s Chief Asia economist Frederick Pneumman told AFP.
What will be the effect of the new American tariff?
Trump’s new tariffs slap 10 percent of the levy on imports from around the world.
But China is particularly difficult to hit – the latest Salvo adds 34 percent at the rate of 20 percent last month, making the total additional tariffs on imports from the Asian Economic Powerhouse installed by this Trump administration to 54 percent.
Tariffs are applied in stages – 10 percent point collision on Thursday, followed by full levy on 9 April.
China is also subject to sector-specific tariffs on steel, aluminum and car imports.
Analysts hope that the new levy will take a significant participation from the country’s GDP, which will increase the expectation of Beijing’s leadership five percent this year.
Julian Evans-Pripered, head of China Economics at Capital Economics, said that in a note he hopes that the economic hit is from 0.5 to one percent of GDP.
According to Peterson Institute of International Economics, China’s top exports to the United States are the top exports of China – country is a major supplier of goods ranging from electronics and electric machinery to textiles and clothing.
And analysts have also warned that due to Chinese goods playing an important role in the supply of American firms, the major knock-on effects of tariffs may also have.
Jean MA, head of Chinese research at the Institute of International Finance, told AFP, “American imports from China are dominated by capital goods and industrial materials rather than consumer goods.”
“Tariff will hurt consumers as well as consumers.”
Chen Venling, the chief economist of the China Center for International Economic Exchange in Beijing, said, “This trade war not only has a disastrous effect on China, but also on the global trading system,” Chinese Center for International Economic Exchange in Beijing said Chain Wennal
How did Beijing respond?
Beijing on Friday performed well on the fast for the United States of “Countsers’ against the United States, slapping 34 percent of the levy on all the US products in the country, which will be effective next Thursday.
It also said that it will apply export control to many rare earth elements used in medical technology and consumer electronics.
According to the US-China Business Council, American exports to China last year were dominated by agricultural products, mainly oilseeds and grains.
Oil and gas closely followed, also in major exports with pharmaceuticals and semiconductors.
In 2022, the council said, more than 900,000 American jobs were supported by American exports of goods and services to China.
Those measures come at the top of the tariffs installed by Beijing last month-15 percent on the import of coal and liquefied natural gas from the US and 10 percent on crude oil, agricultural machinery, large large vehicles and pickup trucks.
Analysts say the tricks are designed to hit Trump’s support base – in the rural American Heartlands who voted for him in the office last year.
Beijing has called for a “dialogue” to resolve the dispute, but any deal will take time.
“The two sides are likely to resume in the next months,” Betty Wang told AFP at Oxford Economics.
“But historical experience suggests that tariffs are usually quick to fall and fall at a slow pace.”
(Except for the headline, the story has not been edited by NDTV employees and is published by a syndicated feed.)