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The Guardian
04-04-2025
- Business
- The Guardian
China retaliates to Trump's ‘bullying practice' with 34% tariffs on US imports
Stock markets around the world plunged for a second day on Friday as China announced retaliatory tariffs of 34% on US imports, signalling a major escalation of a trade war ignited by Donald Trump and feeding fears of a global recession. 'For all imported goods originating from the US, an additional tariff of 34% on top of the current applicable tariff rate will be imposed,' Beijing's finance ministry said. China's commerce ministry said that it would also impose more restrictions on the export of rare earths which are used in high-tech manufacturing such as batteries and electric vehicles. It added a further 16 US companies and organisations to its export control list, meaning that Chinese companies are restricted from doing business with them. China had previously promised 'resolute countermeasures' against Trump's tariffs, which slapped a 10% rate on all imports coming to the US, with extra levies for certain countries, including China. China's state council tariff commission said: 'On April 2, 2025, the US government announced the imposition of 'reciprocal tariffs' on Chinese goods exported to the US. This practice of the US is not in line with international trade rules, seriously undermines China's legitimate rights and interests, and is a typical unilateral bullying practice.' Trump responded on Truth Social on Friday. He said: 'CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!' Trump's announcement on Wednesday led to a plunge in world financial markets and fuelled fears of a global recession. Investment bank JP Morgan said it now sees a 60% chance of the global economy entering recession by the year end, up from 40% previously. Escalation of a trade war featuring the world's two largest economies sent US stock futures sharply lower on Friday, signalling more losses on Wall Street, after the Trump administration's sweeping levies knocked off $2.4tn (£1.8tn) from US equities. The FTSE 100 in London shed more than 300 points since the start of trading on Friday, its biggest one-day decline since March 2023. The Stoxx 600 index of Europe's largest six hundred companies slumped by 4.4%. The price of Brent crude oil has dropped 6.6% to $65.50, its lowest since August 2021. Wang Wen, the dean of Renmin University of China's Chongyang Institute for Financial Studies, said: 'China will never give in to Trump, but it does not exclude co-operation with the United States at the level of mutual respect and win-win co-operation. China knows that co-operation is not sought, but fought for.' Wang said that China's response was 'restrained' and limited to trade measures. However other analysts said that China's response was forceful. Stephane Ekolo, a market and equity strategist for Tradition in London, told Reuters: 'China comes out swinging with an aggressive response to Trump's tariffs. This is significant and is unlikely to be over, hence the negative market reactions. Investors are afraid of a 'tit for tat' trade war situation.' Some analysts had expected the US and China to reach a deal before the 9 April deadline for the US's tariffs to take effect. The Financial Times had reported that Trump was considering using the threat of tariffs to pressure Beijing into allowing Bytedance to sell off TikTok to a US entity. Shameen Prashantham, a professor at the China Europe International Business School in Shanghai, said the mounting trade war was a body blow to global trade. 'I just can't see how there are going to be many winners in this,' Prashantham said. China's industry associations have unanimously condemned the tariffs. China's National Textile and Apparel Council said that it 'supported the government's forceful measures' and that the US had 'damaged the resilience of the global textile industry's supply chain'. Chinese fast fashion companies are expected to be particularly badly hit by the new tariffs. E-commerce giants Temu and Shein have grown to dominate the e-commerce industry in the US thanks to a loophole in the US's import rules which allowed goods valued at less than $800 to be shipped to the US for free. Trump has now closed that loophole, effective from 2 May. Around 60% of duty-free packages coming into the US come from China. But those deliveries will, from May, be subject to a fee of 30% of the value of the goods, or $25, rising to $50 in June. Temu and Shein have yet to comment. China has also filed a lawsuit against the US with the World Trade Organisation.
The Guardian
03-04-2025
- Business
- The Guardian
China condemns ‘unilateral bullying' as it calls on US to drop tariffs
China has condemned the 'unilateral bullying' practices of the US, as it urged Washington to immediately drop the enormous tariffs that have been placed on Chinese goods. Late on Wednesday night, the White House unveiled sweeping new tariffs on all imports to the US. Chinese goods, which were already subject to a 20% levy, received an additional 34% tariff, taking the total tariff to 54%. The additional levy, part of Donald Trump's suite of so-called 'reciprocal tariffs' targeted at specific countries, takes effect on 9 April. China's commerce ministry said on Thursday that it would take 'necessary measures to resolutely safeguard legitimate rights and interests' without specifying what they may be. 'There are no winners in trade wars, and there is no way out for protectionism,' the ministry said. The foreign ministry accused the US of 'bullying' and said that other countries were also opposed to Trump's new policies. Official state media, however, was relatively muted on the topic. This reflected the fact that China, unlike other countries grappling with a new economic reality, is well accustomed to US tariffs, said Wang Wen, the dean of Renmin University of China's Chongyang Institute for Financial Studies. Exports accounted for about 20% of China's GDP last year, with a last-minute push in December as exporters rushed to ship goods before anticipated tariffs from the US. Exports to the US jumped nearly 16% in December. Many of China's main export products, such as electric vehicles and solar panels, are effectively already blocked from the US market because of earlier tariffs, including some levied by the Biden administration. For years, Chinese companies have been moving their supply chains to other countries, particularly in south-east Asia, to circumvent US levies. Now those countries have also been hit with tariffs, with exports to the US from Vietnam subject to a 46% tax and those from Thailand subject to 37%. The president of the European Chamber of Commerce in China, Jens Eskelund, said that the tariffs would probably 'impact certain elements in some of our members' supply chains, while raising a great deal of uncertainty for many others'. Trump also closed the so-called 'de minimus' loophole that allowed low value goods to be imported to the US-tariff free. Approximately 60% of these goods came from China, fuelling the rise of fast fashion and e-commerce companies such as Shein and Temu. Among the countermeasures that China is expected to consider are devaluing its currency, reciprocal tariffs and restricting the export of certain critical minerals. China has already banned the export of gallium, germanium and antimony to the US, citing their potential military applications. But each of these measures has downsides, said Michael Pettis, a professor of finance at Peking University. 'If you reduce the export of critical minerals, you have to reduce the domestic production of those critical minerals, which means putting workers out of business,' Pettis said. 'If you depreciate your currency in response to American tariffs, you're not [just] punishing the US, you're punishing all your trade partners.' Yeling Tan, a professor of public policy at the Blavatnik School of Government at the University of Oxford, said: 'The Chinese government has denounced the US's latest tariffs, but stopped short of immediate retaliation. This signals that Beijing is leaving room for a deal to be struck before tariffs take effect on 9 April. 'China now faces a delicate balancing act. Retaliation might harm efforts to stimulate an already weak domestic economy, and risks deterring the very foreign investment China hopes to attract.'
South China Morning Post
12-03-2025
- Automotive
- South China Morning Post
China will lead the world in smart manufacturing by 2030, report says
China's ambitious 'Made in China 2025' industrial strategy has put the country on track to become a global leader in smart manufacturing within the next few years, though breakthroughs are still needed in several bottleneck technologies, according to a new report by Beijing's Renmin University of China. Advertisement The Made in China 2025 project, launched a decade ago, aimed to propel China to the forefront of a slew of hi-tech industries, including aerospace, electric cars, robotics and telecommunications. Though Beijing has become reluctant to publicly name-check the policy in recent years amid global pushback – especially from the United States – the strategy nevertheless helped China achieve remarkable progress in several key areas, said Wang Wen, dean of Renmin University's Chongyang Institute for Financial Studies. Beijing has not published an official assessment of 'Made in China 2025', but a calculation by the Post last year found that 86 per cent of the targets laid out in the plan had been achieved. At a US congressional hearing on 'Made in China 2025' in February, US experts expressed alarm at China's fast progress in advanced manufacturing and warned that America risked 'losing the next industrial revolution'. Advertisement The Chongyang report comes at a time of intensifying US-China economic rivalry, as US President Donald Trump attempts to pressure manufacturers of high-end products to reshore production to America by weaponising tariffs. For Wang, the Chinese government should stick to its guns by continuing to build on its manufacturing strengths while advancing independent technological innovation. If it does so, the future looks bright, he said.
