The US-China tariff war escalates again! The State Council Tariff Commission of China announced last night at 7 pm that starting from 12 pm Beijing time on April 10, the import tariffs on US goods will be raised from 34% to 84%, pushing the US-China tariff war to a new high point.
China Sanctions 18 US Companies
Simultaneously, the Chinese Ministry of Commerce quickly took countermeasures, announcing last night that 6 US companies would be added to the "Unreliable Entity List", prohibiting them from import, export, and investment activities in China. The reason cited was their involvement in arms sales or military cooperation with Taiwan, which damages China's interests. The list includes Shield AI, Sierra Nevada Corporation, Cyberlux Corporation, Edge Autonomy Operations LLC, Group W, and Hudson Technologies Co.
Additionally, China has added 12 US entities to the export control list, prohibiting the export of dual-use items to protect national security. The list includes American Photonics, Novotech, Echodyne, Marvin Engineering Company, Exovera, Teledyne Brown Engineering, BRINC Drones, SYNEXXUS, Firestorm Labs, Kratos Unmanned Aerial Systems, Domo Tactical Communications, and Insitu.
At the same time, the Chinese Ministry of Commerce reiterated in a statement that the US tariff measures "damage US interests and threaten global supply chain stability", and stated that China will continue to take all necessary measures to defend its national interests.
Trump Eases Tariffs While Intensifying Attack on China
Trump was not to be outdone, announcing a 90-day suspension of reciprocal tariffs for over 75 countries and reducing them to 10%, while simultaneously announcing an immediate increase of tariffs on Chinese imports to 125%. (Previously, US tariffs on China had just been raised to 104%)
Based on China's disrespectful attitude towards the world market, I hereby declare that US tariffs on China will be raised to 125% effective immediately. I hope that in the near future, China will realize that the days of exploiting the US and other countries are no longer sustainable or acceptable.
When Will the US-China Tariff War End?
Development of US-China Tariff Progression
- On April 3, Trump launched a comprehensive tariff policy affecting over 180 countries, including a 10% baseline tariff and high reciprocal tariffs for certain countries. Specifically, Trump focused on China, announcing a 34% reciprocal tariff, bringing the total tariff rate to 54%.
- While many countries expressed willingness to negotiate, China's attitude was entirely different. The next day, China introduced a 34% retaliatory tariff on the US, accusing the US tariff policy of "unilateralism and economic bullying", emphasizing that "there are no winners in a trade war", and vowing to "stay until the end".
- On April 9, Trump imposed an additional 50% tariff on China (bringing the total to 104%) citing China's retaliation, which prompted a strong response from China, raising their tariffs on the US to 84%.
- Currently, Trump has raised tariffs on China to 125%, and China has not yet provided a clear response.
US-China Tariff War is a Lose-Lose Situation
The negative impacts of the tariff war are evident, especially between the two largest economies. The International Monetary Fund (IMF) has warned that if the US-China trade war fully erupts, global economic growth could slow down or even fall into recession.
Most analysts agree that there are no true winners in the tariff war. Institutions like Morningstar point out that trade barriers will result in higher prices for consumers in both countries and reduced corporate profits. US farmers and manufacturers, as well as Chinese exporters and workers, will be significantly impacted. Research has shown that the 2018-2019 tariff war caused US consumers to pay higher prices, while China lost substantial export markets.
However, the US and China currently show no signs of backing down, and there are no planned talks between their leaders. Whether US-China relations will further deteriorate remains a key variable in the global economic landscape.
