In a major upward spiral of the trade tit-for-tat, China just recently declared a massive U.S. goods tariff hike. Beginning on April 10, the Tariff Commission Office of the State Council announced large increases in tariffs. As a share of state spending, they’ll shoot up to 84%, from just the current 34%. Those tariffs were the first step in a United States rollout of a new, more aggressive trade policy that began the first week of April. In retaliation, this dangerous retaliatory measure has become law.
The announcement is a clear answer to the last month’s horrible actions taken by the Trump administration. Among such actions were a maximalist tariff policy aimed at stopping the import of fentanyl and other chemicals into the United States. Even before this most recent escalation, the U.S. unilaterally added new tariffs on a wide range of Chinese products. This change added to the confusion over international trade relations. Additionally, the total tariff level for Chinese goods reached an unprecedented 104% after President Trump declared an additional 50% hike.
Recent tariff increases have been swift and sweeping, and this trend continues to harbor harmful implications for trade between the world’s two largest economies. Analysts are warning that these changes might plunge bilateral trade into a nasty deep freeze. U.S. administration has threatened other countries against retaliation. From the other direction, China’s hard line suggests that it intends to go to the mat, if necessary, to punish strong U.S. economic moves.
While relations between the U.S. and China fall apart, Japan seems ready to engage in conversation over tariff reductions. This unfortunate contrast serves to underscore differing strategies between the U.S. and other major economies in addressing trade disputes. Japan’s openness to dialogue stands in stark relief to China’s current approach, which appears increasingly confrontational as it seeks to assert its economic interests.
Well, the last round of U.S. tariffs just went into effect on April 9. As such, the step deepened already high tensions between the two countries, sparking fears in international markets. As the two countries engage in potentially endless rounds of tit-for-tat tariffs, the threat of even greater retaliation hangs heavily over all other discussions. With just one move — the tariffication of its promised 20 agricultural products — China has shown it is serious about calling the Trump administration’s bluff on economic pain.