China has just made the trade war much worse by applying an 84 percent duty on all but 5 of America’s imported products. This new tariff will go into effect on April 15. This decision is intended to be just one measure in a much more concerted package of measures. It’s currently worth an estimated 12 billion Euros, or $38.3 billion. Further, China will institute export controls on 18 U.S. firms, mostly in defense industries. The announcement is a reminder of just how adamant China is against the United States’ tariff initiatives, which have already thrown global economies into chaos.
China has already released retaliatory measures to meet the previous three rounds of tariffs enacted by the United States. These moves have raised the ire of a wide range of international actors. In counter to the terrible state of affairs, US President Donald Trump has gone in hard. He calls on American businesses to return to the US to avoid tariffs’ impact. He recently took to social media, stating, “ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!”
China’s Response to US Tariffs
China’s most recent tariffs are a 1,000-step escalation in China’s trade war against the United States. Notably, the 84 percent tariff hits a wide swath of American goods. This change is part of a broader push by the Chinese government to retaliate against US economic pressure from tariffs. The Chinese government has vowed to “fight to the end” against what it perceives as aggressive trade practices by the US.
Moreover, China’s commerce ministry announced that it had lodged a new lawsuit with the World Trade Organization (WTO) against America’s 104 percent levy on Chinese goods. The ministry certainly realizes the need to protect its legitimate interests. At the same time, it reiterates with alarm the increasing trade frictions.
“The situation has dangerously escalated. As one of the affected members, China expresses grave concern and firm opposition to this reckless move.” – China (via WTO statement)
China’s consistent promise to stand against trade wars signals its desire to safeguard its economic prosperity during an age of ballooning global antagonism. The country maintains it is taking every step possible to encourage negotiations that would settle differences. To be sure, they’d rather have thoughtful discussion than mounting tariffs.
European Union’s Countermeasures
In retaliation to the US tariffs, the European Union (EU) has released a series of counter-measures. Beginning next week, the EU will put tariffs on many US products. This means things like strict tariffs of up to 25 percent on steel, aluminum, and automobiles. In addition, 20 percent duties will be charged on other American products.
It finds the tariffs that have been imposed to be both unjustified and damaging. A spokesman for the European Commission stated that “the EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy.” The EU has repeatedly made plain its preference for negotiated outcomes with the US that are reciprocal and mutually beneficial.
As part of its trade strategy, the EU aims to protect its economic interests while promoting fair competition in international markets. The possibility for even more escalation still exists, as both sides continue on a path to put their newly announced tariffs in place.
Trump’s Defiance Amid Global Chaos
Our international partners are continuing to exert tremendous pressure, and tariffs from China and the European Union continue to increase. Nonetheless, President Trump is doubling down on his strategy. He keeps on calling for businesses to Bring Their Businesses Home to America to avoid the tariffs. He portrays this transition away from fossil fuels as an opportunity for American prosperity.
“This is a GREAT time to move your COMPANY into the United States of America.” – Donald Trump
Trump’s administration has largely portrayed these tariffs as patriotic steps to level the trade playing field around the world. Critics say these type of policies will only short term boost industries at the expense of long-term economic stability and prompt greater retaliation from foreign nations.
Additionally, experts are raising alarms that a Chinese devaluation in response to US tariffs would shake up the current rules of global trade. This change would add new burdens on increasingly strained economies globally. One analyst noted, “If China starts devaluing, then that is a tax on the rest of the world and everyone will have to keep raising their tariffs to offset the devaluation.” This possible scenario would result in the aggravation of trade and geopolitical tensions as well as higher prices for consumers around the globe.
Scott Bessent, former US Treasury Secretary, explained the need for a united front from allies when tackling trade disputes with China. He stated, “I think … at the end of the day that we can probably reach a deal with our allies… And then we can approach China as a group.”
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