The US has targeted new tariffs on Chinese imports, including a 34% rate, increasing the total to 54%. China has demanded an instant rollback and threatened countermeasures to shield its economy. The rising trade war risks global supply chains, increases inflation risks, and could contract US GDP. Other impacted countries, such as Vietnam, Japan, and the EU, are also planning retaliatory actions, paving the way for more economic disturbance.
China Slams US Tariffs, Threatens Repercussions
China’s Commerce Ministry condemned the move sharply. It blamed Washington for disregarding past trade deals and profiting from international trade for nearly three decades. “China strongly opposes this and will implement corresponding countermeasures to protect China’s own rights and interests,” the ministry stated.
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The new US tariffs consist of a general 10% charge on all imports, with extra charges against certain countries. China has an extra 34% tariff, bringing its total to 54%. Other countries that are hit include Vietnam (46%), Japan (24%), and the European Union (20%).
Trump signed an executive order to close the “de minimis” trade loophole. This loophole had been used to import low-value products from China and Hong Kong duty-free.
Global Economic Impact and China’s Next Move
The levies would lead to sudden price increases for American consumers. The Federal Reserve Bank of Boston has estimated that they would increase inflation by 1.4 to 2.2 percentage points. The International Monetary Fund (IMF) forecasts that these actions would reduce US GDP by 1%.
China is already looking into countermeasures. It could aim at major American exports, including agriculture, automobiles, and technology. This could further tighten US-China trade relations and impact American businesses.
With top US trading partners also subject to tariffs, China’s exports could be slowed. Some Chinese companies have relocated production to Vietnam, Mexico, and Malaysia to escape US tariffs. But new tariffs on those nations now complicate that strategy.
A summit between Trump and China’s President Xi Jinping is due in June. Both leaders are on the back foot, observers say—Trump to look strong, and Xi to not look weak. The trade war is not ending any time soon, and global markets are preparing for the next installment of economic shock.
