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Beijing has struck new 10% tariffs imposed by the United States on Chinese exports, claiming that it “would take the countermeasures necessary to defend its rights and its interests” while trade tensions between the two powers enter a new phase.
The Ministry of Foreign Affairs said on Sunday that China opposed the prices which, according to him, had been introduced “under the pretext of the fentanyl issue”.
“The United States must see and solve its own fentanyl problem in an objective and rational way instead of threatening other countries with increases in arbitrary prices,” said MFA.
The Chinese Commerce Ministry said it would take legal action with the World Trade Organization.
The 10% additional samples are accompanied by new 25% tariffs on Canada and Mexico exports, while President Trump is embarking on an extended trade war, following a series of measures imposed on China by the United States during its first mandate.
Trump said that the influx of “illegal extraterrestrials” and that drugs, including fentanyl opiates, had created a “national emergency” that justified the prices.
During the electoral campaign last year, he had warned of prices up to 60% against China, but later reported a rate of 10%. He linked samples to the role of the country in the flow of ingredients or “precursors” for fentanyl.
China has agreed to take action to stem the flow of precursors at a summit between President Xi Jinping and President then Joe Biden in San Francisco in November 2023. Since then, Beijing has taken certain measures welcomed by the Administration Biden, but criticism, including some in outgoing administration, wanted China to do much more.
Although widely awaited, the measures pose an important challenge for the Xi Jinping government at a time when the weaknesses of domestic demand made it particularly dependent on economic growth exports. Last year, the commercial surplus of China reached a record of almost 1 TN.
Tao Wang, Chinese chief economist at UBS Investment Bank, said the prices had been imposed faster than expected and that the coverage rate of 10% was larger than the progressive measures under the first administration of Trump.
“It is wider and probably much greater than the first round,” she said, adding that many expected Trump adding more prices once his civil servants have completed an examination of politics commercial in April.
Wang said she was expecting a blow for China’s GDP from 0.3 to 0.4%.
In a report published last week, Morningstar said that 10% prices would affect household appliances, home furniture, lithium batteries and electric vehicles in China. But that added that many companies “would probably see an impact less than 5% of their respective total income” and that they “may not be as bad as they are fearing for certain industries”.
Beijing also faces trade tensions with the EU on the prices imposed on its electric vehicles last summer, which led to a wave of countermeasures on Cognac products in Dairy.
