4 days ago
- Business
- South China Morning Post
As US' effective tariff rate rises to 17%, analysts say China has an opportunity
The United States has become one of the most protected markets in the world, with its effective tariff rate against the world rising to 17 per cent from around 2 per cent last year – prompting renewed calls in China for greater trade diversification and a strategic push to seize opportunities in technological self-reliance and global governance.
Fitch Ratings updated its US Effective Tariff Rate (ETR) Monitor – an interactive tool tracking tariff policy – last week, following Washington's announcements on July 27 and July 31 of new tariffs on most trading partners.
As a result, the US effective tariff rate now stands at 17 per cent.
China continues to face the highest tariff burden among America's major trading partners, with China's ETR at 41.4 per cent, up from 10.7 per cent at the end of last year.
Liao Yue, a lecturer at Renmin University of China, pointed out that US President Donald Trump's second term has pushed his Make America Great Again (Maga) agenda to new heights.
'Maga supporters believe that free trade has put the US at a disadvantage – especially blaming China for the hollowing out of American industry – and they advocate for protectionist policies such as high tariffs and reshoring manufacturing to restore the economic dominance of a perceived golden age,' Liao said during an online forum last week.
He added that while the near term may see China facing more intense trade frictions, or even a full-scale tariff war, a window of opportunity exists for China in the weakening of the US alliance system under Trump's 'America first' agenda.
