Trade between the two largest economies in the world – a link that was determined The world economy For two decades – there are on the support of life. American tariffs on China Now stand on 145%; Chinese tariffs on the US now stand on 125%. And this is just the base line, not including additional tariffs Specific goods such as steel (in case of the US) either) Agricultural products (In the case of China).
“The tariff rates are now so high that they will be unprofitable for most direct bilateral trade,” says Eling Tan, Professor of the Oxford State Policy.
Even Beijing admits that the US goods are not likely to have tariffs in the United States. “Given that American goods are no longer provided in China at current tariffs, if the US further raises tariffs for Chinese exports, China will ignore such measures,” the country’s finance ministry said in the country statement Announcement of their new 125% tariffs.
Tariffs quickly unwind close economic relationships: Chinese manufacturers built products, from the lawn -Kreeslaw and Christmas decorations, down to smartphones and semiconductorAnd US consumers and businesses bought them.
Both Washington and Beijing reported that they were open for negotiations, even if there are no public signs they talk about. Everyone thinks that the other needs to move at first; morning on Friday, Cnn report In order for the US and not requested a phone call from the XI, they demanded that China ask for a phone call with Trump.
The US may have realized that its steep tariffs in China are impossible. At the end of Friday the White House liberated E -goods such as smartphones, laptops and computer processors from the US, including some imposed on China.
Tariffs and trade
In the US, in 2024, the US imported goods from China worth $ 438 billion, compared to China’s exports worth $ 143.5, reports Data from the US Census Bureau.
Trump’s tariff for 145% on Chinese imports is just a base line. There are also 25% tariffs on imports of steel and aluminum, and The threat comes Of the 25% tariffs for any country used by Venezuelan oil, a set that includes China. And here’s everything Previously tariffs Received by previous administrations: Chinese home appliances, solar panels and EVS.
Beijing also slapped Additional tariffs on American goods such as heavy equipment, oil, gas and agricultural products. This also imposed a number of other unverified barriers; For example, on Friday, Chinese officials said they would Reduce the number of American movies approved for examination in China.
If the current situation remains – 145% of China tariffs, 10% on all other – both Western and Chinese companies, it is likely to accelerate its desire to create production centers outside China in countries such as Vietnam, India, and Mexico.
The problem is that Trump’s trading hawks want to relax “China plus one“Strategy. Now Trump” Liberation Day “” Liberation Day ” Obtained high tariffs In countries such as Vietnam and Cambodia, which attracted Chinese investments. Officials such as Trump’s trade advisor Peter Navaro Want governments focus on Chinese trade as a state of reducing tariffs.
Vietnam proposes to hack Chinese goods that travel through their territory as part of the tariff negotiations with the USA, Reuters reports Referring to a government document and an unnamed source.
Then there is a risk that Trump cannot reach trades with trading partners, and the “Liberation Day” tariffs are returning. “The factories that have already moved to the countries are most likely increasing the production to take advantage of the pause, but there may be less new investments, fearing tariffs for” plus one “country,” Tan believes.
The steep tariffs in China are also encouraged by US companies that export the second largest economy in the world to consider its own supply chain diversification. Friday in China semiconductor branch association confirmed In order for companies not to pay tariffs for US chips and chips while they were made in third place.
China is continuing
Trump’s representatives claim that China is much more vulnerable to the trade war than the US, claiming that China’s economy is relying on the US consumer. If the US close its doors, there will be no one to sell in China and the economy will collapse.
Now the White House also insists that Trump’s pause was A deliberate strategy highlight China by opening negotiations in the rest of the world. “You can even say that he moved to China to a bad position,” the Treasury Secretary Scott Baby said on Wednesday on Wednesday; He also suggested the US and his ally Can work together Pressure on China on trade.
In truth, China is now less rested on the US than during the first Trump administration. Less than 15% of China’s exports are directly in the US, which is compared to 19% in 2018. Export beef to Australia to China for the past two months Already at 40% From year to year.
“There are options in China,” Brown says, noting that China’s largest trading partner is now Southeast Asia. “This is not necessary for the US in such a way that it is.”
To be understood, economists are waiting Qi and Goldman Sachs Reduction of GDP forecasts in 2025 for the second largest economy in the world.
However, Beijing takes a bold position in its fight against the United States, and the press -secretary said China will “Fight to the end“If the US is stored in a trade war.
Puting aside, Beijing may be in a safer position than the US Trump Trade War Broken stock markets. Hiking yieldsand Immersing the US dollar– And it’s before inflation effects The tariffs got seriously.
Decter Roberts, a senior non -resident officer at the World Chinese Center of the Atlantic Council, explains that “people in China really feel that they can” eat bitterness “, citing a Chinese phrase that means to insist through difficulties.” This plays a tough position. I think they believe that end up, if anyone will blink, it will be the US “
Roberts adds that at least in terms of Beijing, the first trade war has never ended. Biden’s administration continued the previous Trump tariffs on Chinese goods. Biden also imposed its own tariffs like 100% tariff Export bans to USA.
This means that Beijing has been on a “trading war” since 2016. China has built trade relations with other markets, found new sources to replace US goods and invested in its technology companies. “China has been preparing for the world with less access to the US market for several years,” Tan says.
And the trade war, though painful, can accelerate some other Beijing priorities. “Surprisingly, this kind of fits into the long -term Beijing’s long -term targets to move its economy from its dependence on the West and export,” Roberts says.
However, China cannot easily move its export markets to other regions such as Europe, the Middle East or Southeast Asia. For one, these regions are even developed markets, such as Europe – they do not really have the same consumption potential as Americans. Then there is Risk of occurrence. “These countries are cautious about the rise of Chinese imports distracted from the US market,” Tan warns.
Is the transaction not a deal?
Economists largely agree with the complete interchange between the US and China will be very painful for both countries. Tariffs are more than 100% “absolutely punitive”, – says Ian Osgud, Professor of International Relations at the University of Michigan. “There are many businesses in the United States that may not survive this. Even big retailers will just fight.”
This may mean that, after all, both sides will try to find some way to scale things back – otherwise the US can unilaterally drop some of its tariffs when the pain begins to beat. Even then, the tariffs are likely not to be extended to the level by 2014, not to mention the level by 2018. OSGUD believes that tariffs can be brought to relatively more “reasonable”, perhaps from 15% to 30%.
However, the rapid escalation of the US-China Trading War raises an awkward question: what does the world look like when the two largest economies refuse to fight each other?
A world in which Beijing and Washington cannot de -escalate can be dangerous. Business relations with the availability of companies and foreign citizens really have a “influence on quenching”, – says Roberts, even if the idea is sometimes overloaded. “If you are increasingly isolated and you have no business relationship … The likelihood of a conflict is certainly increasing.”
“In the end, the fate of two gigantic economies will remain intertwined. The collapse of direct bilateral trade will lead to harm to businesses and consumers in both countries,” Tan says.
“It will be a much more changing world.”
Originally this story was presented on Fortune.com
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2025-04-12 23:07:00
Nicholas Gordon
