Trump’s announcement on Saturday confirmed his long-threatened tariff hikes had been critical and never a gap gambit in negotiations.
The mercurial magnate has additionally tied tariffs to the destiny of Chinese language-owned social media app TikTok – warning of retaliation if a deal can’t be struck to promote it.
However Beijing’s sturdy riposte has left little doubt that it’s going to push again in opposition to measures it has lengthy seen as unfair.
The Chinese language commerce ministry has vowed “corresponding countermeasures to resolutely safeguard our personal rights and pursuits”, with out saying what type they are going to take.
It has additionally mentioned it is going to take its case in opposition to Trump’s tariffs to the World Commerce Group, although that’s unlikely to convey change within the brief time period.
Extra fast is the menace by Beijing’s overseas ministry that the duties “will inevitably have an effect on and harm future bilateral cooperation on drug management”.
That casts a brand new shadow over counter-narcotics talks that resumed after Biden met Chinese language President Xi Jinping in San Francisco in 2023.
A US-China working group later mentioned it might step up regulation of three key fentanyl precursors, although it’s not clear how a lot success has been achieved.
The brand new tariffs will in all probability not have a serious influence on China’s financial system, analysts mentioned.
Given Beijing had already factored in increased tariffs this yr, the transfer was “unlikely to alter the market expectation on China’s macro outlook”, mentioned Zhiwei Zhang, president of Pinpoint Asset Administration.
“I do not assume China must take motion, akin to change fee depreciation, to offset (the influence),” he added.
In response to Bloomberg Economics, the ten per cent levy may knock out 40 per cent of Beijing’s items exports to the US, affecting 0.9 per cent of Chinese language GDP.
That may be a small fraction of China’s huge financial system, however it might put further stress on policymakers already grappling with slowing development, a property sector disaster, and sluggish home consumption.
