(People News) - On February 1st local time, U.S. President Donald Trump signed an executive order to impose an additional 10% tariff on goods imported from China, on top of existing tariffs. The new tariffs are tentatively scheduled to take effect on Tuesday, February 5th. Shortly after, Trump also announced the tariffs on his social media platform, Truth Social. He wrote that the tariffs were implemented under the International Emergency Economic Powers Act (IEEPA).
Bloomberg Economics estimates that the 10% tariff on Chinese goods could lead to a 40% reduction in China’s exports to the U.S., posing a 0.9% risk to China's GDP.
China is facing significant domestic economic challenges, including a sluggish real estate market and deflation. Since the end of September last year, the effects of the Chinese government's stimulus measures have begun to wane. The greater the impact of the tariffs, the more Beijing will have to strengthen its support for the economy.
Bloomberg Economics Chief Asia Economist Chang Shu stated in a report last month that a 10% tariff on China "would be enough to change the game."
On Friday, Trump stated in the Oval Office, "Tariffs will not cause inflation. Tariffs bring success." He added, "There may be some temporary short-term disruptions, and people understand that." Trump also vowed to impose new or additional tariffs on many other categories of foreign goods, including microchips, oil and gas, steel, aluminum, copper, and all forms of pharmaceuticals.
As expected, China reacted furiously. A spokesperson for the Ministry of Commerce stated on February 2nd that China was "strongly dissatisfied and firmly opposed" to the move. The Ministry of Commerce claimed it would "take corresponding countermeasures and firmly safeguard its own interests," and that it would file a lawsuit with the World Trade Organization (WTO).
On February 2nd, China’s Ministry of Foreign Affairs also responded on its website in a Q&A format. In addition to the usual official rhetoric, it issued a veiled threat related to anti-drug cooperation, stating: "The imposition of additional tariffs is unconstructive and will inevitably affect and undermine future cooperation on anti-drug issues between both sides... We urge the U.S. to correct its erroneous practices..." The implication was clear: if you impose tariffs, the Party will find ways to let more fentanyl flow into the U.S., refusing to support anti-drug efforts. The tone resembled that of a kidnapper saying: "If you don't pay the ransom, I'll harm the hostage."
Logically, China should have anticipated the U.S. tariff hike and prepared contingency plans in advance. However, as of now, there has been no clear indication of specific retaliatory measures from China. Interestingly, a country like China, which rarely adheres to international legal norms, is now turning to international legal mechanisms. Whether it can win a lawsuit is uncertain, but the world can see that China has long exploited loopholes in the free world. Although the U.S. tariff hike is entirely a domestic matter, China is no longer talking about non-interference in other countries' internal affairs. This reveals China’s dependence on the U.S. and its fear of the tariff war, evident between the lines.
The Ministry of Commerce spokesperson also stated today that China urges the U.S. to meet halfway, face issues directly, engage in candid dialogue, strengthen cooperation, and manage differences on the basis of equality, mutual benefit, and mutual respect.
However, the Chinese Ministry of Commerce did not specify when it would file a lawsuit with the WTO, nor did it mention increasing tariffs on U.S. goods. This gives the impression that China is merely issuing verbal threats for now, leaving room to either advance or retreat. If Trump has more aggressive measures, China might accept the 10% tariff. But if the U.S. shows willingness to engage in mutual respect and dialogue to manage differences, China may attempt to gain more ground—"retreat when the enemy advances, advance when the enemy retreats." The Communist Party’s tactics from Mao Zedong’s fight against the Nationalists are still being applied in its economic battle against the U.S., proving timeless. This demonstrates how panic-stricken China is without global economic support or the U.S. market. The so-called opposition is practically a plea for mercy.
Netizens have also interpreted the situation: What exactly are the differences, and how will they be managed or cooperated on? China may say one thing and do another. Now that it's using the term "manage," who was causing the trouble before? "In the end, we will use every possible means to lure American imperialists into the traps set by our Party."
News magazine bootstrap themes!
I like this themes, fast loading and look profesional
Thank you Carlos!
You're welcome!
Please support me with give positive rating!
Yes Sure!