The United States announced an additional 10% duty on Chinese imports starting March 4, marking the latest escalation in the ongoing trade conflict between the world's two largest economies. The decision comes as a response to China's involvement in the fentanyl trade, which the US has heavily criticized. China's Ministry of Commerce has strongly opposed the new tariffs, promising necessary countermeasures while accusing the US of shifting blame. This move follows the previous imposition of a 10% tariff on February 4, intensifying the economic standoff.
China's exports have been one of the few positive aspects in its otherwise slowing economy. The US remains China's largest trading partner on a single-country basis, making these tariffs highly significant for both nations. Despite the April Second Reciprocal Tariff date remaining in effect, China's Ministry of Commerce issued a statement highlighting its commitment to defending its rights and interests against US measures.
"If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests." – Ministry of Commerce spokesperson
China's Ministry of Commerce has justified its drug control efforts and labeled the latest tariff threats as blame-shifting tactics from the US. The Ministry urged the US to resolve conflicts through dialogue rather than coercion.
"We urge the U.S. side to not repeat its own mistakes, and to return as soon as possible to the right track of properly resolving conflicts through dialogue on equal footing." – Ministry of Commerce statement
In retaliation, China has implemented measures such as raising duties on certain US energy imports and placing two American companies on an unreliable entities list. Despite these actions, China's response is expected to remain measured, aiming to avoid exacerbating its sluggish economic growth.
"In the short term, China's response will likely include raising tariffs on select U.S. imports, adding more American firms to its unreliable entity list, and potentially further tightening export controls on critical minerals" – Neil Thomas, fellow on Chinese politics at Asia Society
The Chinese government has increased controls on critical mineral exports essential to the US. This strategic move could have significant implications for American industries reliant on these resources.
"The sharpest arrow that China has in its quiver would be to restrict U.S. access to critical minerals that can't readily be sourced elsewhere." – Stephen Olson, visiting senior fellow at Institute of Southeast Asian Studies
The US is also investigating China's compliance with a trade deal reached during President Trump's first term in 2020. The results of this investigation are scheduled for delivery by April 1. Meanwhile, China hopes to avert further import tariff hikes and is leaving room for negotiation.
Analysts suggest that China faces two options: either continue with measured responses in hopes of de-escalation or opt for more aggressive retaliatory measures.
"leaves Beijing with two options: either roll out continued measured responses in the hope of avoiding further escalation and maybe even rolling back existing measures; or going much bigger" – Deborah Elms, head of trade policy at Hinrich Foundation
President Trump reinforced that the April Second Reciprocal Tariff date is set and will be upheld.
"The April Second Reciprocal Tariff date will remain in full force and effect." – Donald Trump, U.S. President
China's restrained approach aims to avoid severe impacts on its already challenged economy while maintaining pressure on the US to reconsider its stance.
"measured" – Neil Thomas, fellow on Chinese politics at Asia Society
"restrained" – Alfredo Montufar-Helu, head of China center at The Conference Board
The Ministry of Commerce emphasized that the tariffs imposed by the US add undue burdens on American businesses and consumers and disrupt global supply chains.
"adds to the burdens on American businesses and consumers and disrupting the global supply chain" – Ministry of Commerce statement