Donald Trump increased their “reciprocal tariffs” on Chinese goods after they were suspended on April 9 for major US trading partners. Most imports from China are subject to US trade taxes that are now 145 percent higher. Beijing retaliated by paying 125 percent on US goods in its own retaliation.
Trump has long alleged that China is a trade tycoon, and his tariffs are necessary to revive US manufacturing and bring jobs back to the country. He also wants to finance tax cuts through tariffs. The majority of economists are skeptical about Trump’s ability to accomplish his objectives.
The US and China are currently playing a high-stakes game of chicken. Which nation will prevail and which will continue to do so is awaited by the world. Here’s where the tariff war with China is as Trump enters his second year as president:
What is going on with the negotiations?
Trump recently emphasized the possibility of a Chinese-China trade deal. The US president predicted that his tariffs on China would “come down significantly” in the near future last week.
Trump’s statement on April 23 stoked fears of a de-escalation and declared, “We’re going to have a fair deal with China.” Without going into further detail, he added that his administration was “actively” negotiating with the Chinese side.
However, the Chinese Ministry of Commerce rejected President Trump’s assertions on April 24 and stated that no discussions were taking place between the two nations.
He Yadong, a spokesman for the ministry, said that any claims about the progress of China-US economic and trade negotiations are unsupported and unsupported.
He also emphasized that Beijing would not let Washington avoid economic blowbacks, but he also said that talks were “wide open.”
China was reportedly considering exchanging exemptions for some of the 131 products on the list last week, according to the Reuters news agency.
Beijing has not yet made a public opinion on the matter.
Are US exports affected by the tariff war?
Less than three weeks ago, Trump imposed extensive tariffs on China. The impact won’t be completely felt until later in the year for US businesses. The warning lights are already flashing red.
The US Department of Agriculture’s data shows that US soybean exports, the largest US farm export, dramatically decreased for the first full week of reporting since Trump’s announcement to impose tariffs on China, were from April 11 to April 17.
US soybean sales decreased by 50% by April 17 from the previous week. China, which was until recently America’s largest exporter of the legume, saw a 67 percent decline in weekly soya bean exports.
The University of Neuchatel in Switzerland, Piergiuseppe Fortunato, an adjunct professor of economics, predicts that China’s retaliatory tariffs will be particularly hard on US farmers. Some businesses may cease operations. He added that China-related industries would experience strain in all of them.
US exports to China totaling $ 15 billion in oil, gas, and coal in 2023. Losing that market would hurt US energy companies.
Will US imports suffer as a result?
Cargo shipments have fallen since Trump’s tariff war began. Chinese freight bookings for the US fell by 30 to 60% in April, according to Linerlytica, a provider of shipping data.
After Canada and Mexico, the drastic drop in shipping from America’s third-largest trading partner has not yet been felt. However, thousands of businesses will need to restock their inventories in May.
Walmart and Target told Trump, according to Bloomberg News, that starting next month’s meeting is likely to result in empty shelves and price increases. Additionally, they cautioned about potential supply shocks coming up until Christmas.
In 2022, electronic goods, including TVs and washing machines, accounted for 46.4% of US imports from China. Additionally, China imports a lot of the ingredients for many of its clothing and pharmaceutical products. Starting next month, these goods’ prices will start to go up.
Due to tariffs, the International Monetary Fund increased its US inflation forecast by 1 percentage point to 3 percent in 2025 on April 22. Additionally, the lender cut short its prediction for US economic growth and raised its prediction that the country will experience a recession this year.
What will the impact be on China’s economy?
Washington and Beijing continue to be significant trading partners despite the rising tensions between the US and China.
The US imported $438.9 billion worth of Chinese goods last year, according to the Office of the US Trade Representative.
That accounts for roughly 3 percent of China’s overall economic output, which is still heavily dependent on exports.
According to a report released to its clients this month, Goldman Sachs predicted that China’s gross domestic product (GDP) would be impacted by Trump’s tariffs by as much as 2.4 percentage points.
China’s top officials, on the other hand, promised to meet its 5-percent GDP growth goal by stating that the nation could survive without American farm and energy imports.
Domestic farm and energy production, according to Zhao Chenxin, vice chairman of the National Development and Reform Commission, would suffice to meet demand.
It won’t have a significant impact on our nation’s grain supply, Zhao said on Monday. “Even if we don’t purchase feed grains and oilseeds from the United States, it won’t have a lot of an impact on our country’s grain supply.
He added that if businesses stopped importing US fossil fuels, China’s energy supplies would only have a limited impact.
According to experts, China has been preparing for this crisis in some ways.
According to Fortunato, tariffs will slow GDP growth because the US is one of China’s biggest export markets. Beijing, which started diversifying its imports from the US during the first Trump trade war in 2018, has done this cunningly.
He added that “the US depends on China for up to 60% of its crucial mineral imports, which are used in everything from clean energy to military technology.” The US is therefore more vulnerable because the flow is in opposition.
Could the US lose its standing in terms of geopolitics?
Trump’s desire to force US allies into a trade war has never been made public. The administration stated that it intends to negotiate free trade agreements with Japan, Great Britain, and the European Union.
In general, reports suggest that Washington is urging trade partners to cut their economic ties to China in order to avoid Trump’s “reciprocal” tariffs.
However, US allies appear to be overwhelmingly opposed to any Chinese economic showdown. The European Commission stated last week that it had no intention of “decoupling” from China.
It would be foolish to ignore China, according to UK Chancellor of the Exchequer Rachel Reeves, who recently addressed the Daily Telegraph newspaper.
Many nations are unable to cut their trade with Beijing. Particularly with China, the EU has a significant trade deficit. Its already sluggish economy would suffer if it were prevented from getting access to Chinese goods, both consumer goods and inputs for industry.
China’s trade role is just as crucial in developing nations. About a quarter of imports from China are made by Bangladesh and Cambodia. Both Nigeria and Saudi Arabia rely on Beijing for imports of goods.
Countries’ “trying to reduce America’s trade deficit with China” is “fragile to see why they would want to undermine their own business interests,” Fortunato said. Trump may be forced to act quickly in this regard to lower tariffs with China.
Trump may be losing some of his support among Republican voters.
The Chinese Communist Party should not be concerned about the upcoming election cycle. Beijing has the political upper hand in Trump’s trade dispute because of Trump’s Republican Party. It has more time on its hands, to put it simply.
His sabre rattling already seems politically costly for Trump’s party, according to  . Americans who say Trump’s economic actions have hurt them personally more than they have helped, according to a new Economist-YouGov poll.
And the president’s economic management has had its lowest ever rating in a Reuters-Ipsos poll on March 31; that figure was 37 percent, which is the lowest level ever recorded.
According to experts, if Trump continues to lead, it is possible that his approval ratings will drop even further, putting in strain on the Republican Party’s fragile hold on the US House of Representatives and possibly the Senate.
Source: Aljazeera
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