China has pushed back against the United States’ latest round of tariffs, announcing retaliatory measures that could further escalate tensions between the two economic powerhouses. The Chinese government confirmed on Tuesday that it will impose additional tariffs of up to 15% on certain U.S. goods starting March 10, as well as introduce export restrictions targeting 15 U.S. companies.
Retaliatory Tariffs and Export Restrictions
The new tariffs by China predominantly target U.S. agricultural goods, including corn and soybeans, which are now subject to increased duties of 15% and 10%, respectively. The move comes after the U.S. imposed its own tariffs on Chinese goods, with a new round of duties taking effect this week.
Additionally, China announced export restrictions on 15 U.S. companies, including Leidos and General Dynamics Land Systems. These measures, according to China’s Ministry of Finance and Ministry of Commerce, represent Beijing’s strong opposition to what it perceives as economic aggression by Washington.
In a statement, Lou Qinjian, a spokesperson for the third session of the 14th National People’s Congress, reiterated that China will not tolerate pressure or threats from the U.S., highlighting the deepening divide between the two nations.
Escalating Trade Tensions
This latest development marks a significant escalation in the ongoing trade dispute, which has been characterized by tit-for-tat tariff measures and growing economic nationalism on both sides. The U.S., under the Biden administration, introduced a 10% tariff on Chinese goods on Tuesday, doubling the total amount of new tariffs imposed within the past month to 20%.
China’s Ministry of Commerce issued a statement rejecting these U.S. tariffs, calling them harmful to bilateral trade relations. The ministry urged Washington to withdraw the tariffs, warning that Beijing will continue to take countermeasures if the U.S. persists in its approach.
Economic Impact
Analysts have noted the potential economic ramifications of the escalating trade war. Frederique Carrier, head of investment strategy at RBC Wealth Management, highlighted the risks of retaliation and escalation, pointing out that targeted responses from countries like China are designed to demonstrate displeasure without fully mirroring U.S. actions.
China’s state-backed Global Times reported that Beijing is considering further retaliatory tariffs on U.S. agricultural products, which constitute a significant portion of American exports to China. In 2023, U.S. agricultural exports to China, including soybeans, accounted for $22.3 billion or 1.2% of U.S. exports, according to Allianz Research.
Other key U.S. export sectors, such as oil and gas ($19.3 billion) and pharmaceuticals ($15.6 billion), may also face future restrictions, further straining the trade relationship.
A Troubling Trend
The latest round of tariffs and retaliatory measures signals a troubling trend of worsening economic relations between the two nations. The average effective U.S. tariff rate on Chinese goods is now expected to reach 33%, up from 13% before President Joe Biden’s second term began in January.
China’s response reflects its growing unwillingness to accept what it views as economic coercion from the U.S. As the annual meeting of the National People’s Congress kicks off on Wednesday, Beijing is likely to emphasize its commitment to safeguarding its economic sovereignty.
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