Non-rating business organization Moody Analytics has recently revealed, that China had reasons to exercise restraint in announcing retaliatory tariffs against the US.
This opinion coincides with a time, when America has already imposed import tariffs Chinese critical goods.
Further Moody Analytics report has also revealed that a retaliatory action from China is expected, but full-blown tit-for-tat trade war is unlikely.
Explaining its rationale, Moody analytics has recently disclosed, that China’s economy at this stage is fragile. As household spending and the property market, are on the decline. With manufacturing for export markets being an only bright spot.
So, in this way, Beijing won’t take the risk of cutting off his nose to spite its face. Especially during the time, when China is desperately encouraging new foreign investment.
Meanwhile, China has described these measures as “political Manipulation”. Chinese Ministry of Commerce has also announced, that it will take ‘resolute measures to safeguard its own rights and interests’
Earlier, US President Joe Biden had imposed heavy tariffs on Chinese products, which include batteries, EVs, steel, solar cells, and aluminium.
These tariffs consist of 100 per cent tariff on electric vehicles, 50 per cent tariff on semiconductors and a 25 per cent tariff on Chinese imported electric vehicle batteries.
As for other items, higher tariff will be attracted on medical gloves, dical gloves, syringes and needles, some critical minerals, and solar cells etc.
Talking about US imposed Tariffs, Moody Analytics believe tariff on Chinese imports will increase around 1.1 percentage points within next three years.
However, as per White house, Chinese exports to US will be affected worth USD 18 billion.
Meanwhile, addressing the topic of EVs and its impact on China’s EV manufacturers, Moddy Analytics bluntly revealed, “not much”.
But the report has also warned, that Chinese will try to bring their goods through other means. Like rerouting their goods through countries with little to no tariff.
