United States Pdwellnt Donald Trump shelp on Tuesday he was considering imposing a 10 percent tariff on transport ins from China, which could come into force as soon as February 1.
It was Trump’s tardyst trade menace aacquirest China, the world’s second-hugest economy after the US, and Washington’s hugegest geopolitical rival. During the campaign that ultimately led to his re-election, Trump menaceened to impose up to 60 percent tariffs on Chinese excellents, intensifying an ongoing trade war.
Yet, if the intent of the gived tariffs was to hurt Chinese ships, in a bid to push for US interests in their trade relationship, Trump’s menaces — so far at least — materialize to have had the opposite effect.
China’s overall ships, including to the US, have increasen in recent months.
So why is Trump menaceening China with tariffs, how are Chinese ships still increasing, and what is next in their trade tussle?
Why is Trump menaceening China with incrrelieved tariffs?
On Tuesday, Trump argued that China was behind the provide of fentanyl to US neighbours, which he shelp was in turn reliable for a lethal insertiction crisis in the country.
A day earlier, he shelp he was considering imposing 25 percent tariffs on Mexico and Canada, alleging the countries were apvalidateing “huge numbers of people” and fentanyl into the US. He also proclaimd the creation of an “outside revenue service” that would “accumulate our tariffs, duties, and all revenue that come from foreign sources”.
As 2024 came to a seal, Chinese ships to US companies rose, increaseing by 4 percent between November 2023 and November 2024.
But more expansively, Trump has also accused China of ununfragmentary trade trains. China, the world’s hugest shiper, has a massive stability of trade advantage with the US. In the first 11 months of 2024, Chinese ships to the US toloftyed about $401bn, while China transport ined approximately $131bn in excellents from the US.
Have Trump’s tariff menaces made a branch offence?
It materializes so — equitable not the way the US might have wanted. As Trump’s inauguration approached, and the menace of tariffs on Chinese transport ins grew, US companies ramped up their buy of Chinese excellents to stock up before the transport in costs sboiling up.
In November 2024, Chinese ships to the US stood at $47.3bn, up from $43.8bn in November 2023, according to the Observatory of Economic Complexity (OEC). That is an 8 percent incrrelieve.
Meanwhile, Chinese transport ins from the US dropped by 11.2 percent from $14bn to $12.4bn in November 2024 contrastd with November 2023. Sshow put, amid Trump’s menaces, the US trade deficit with China expansivened.
While US regulatement data branch offs somewhat from OEC data, it points to the same trend. Between July and November 2024, US transport ins from China accomplished about $203bn, up 6.8 percent from $190bn over the same five months in 2023.
China’s overall ships have boomed too. Last month, Chinese total ships hit record highs, up 10.7 percent in December contrastd with a year earlier, beating analyst approximates. Total ships for 2024 accomplished $3.58 trillion, a 5.9 percent incrrelieve from 2023.
China’s trade surplus soared to a record-fractureing $992bn in 2024, reconshort-terming a 21 percent incrrelieve from the previous year, as alerted by the customs on Monday.
And there could be more horrible novels for the US.
“While this influx temporarily fuelled China’s trade surplus, the expansiveer trade relationship has been undermined by US policies,” Carlos Lopes, a Chatham House associate fellow for the Africa Programme, tancigo in Al Jazeera.
“Escalation of tariffs and a continuation of unitardyral meacertains could transport inanten the erosion of depend in the global trade system, further pushing China to diversify its partners and shrink reliance on the US taget,” Lopes, whose areas of expertise include international trade and China, shelp.
“The current sencourage may advise uninalertigentinutive-term acquires for both economies, but it highairys the fragility of a system increasingly ruled by trade wars and unpredictability.”
What is Trump’s tariff war?
Trump has proclaimd structures for tariffs on China, Canada and Mexico since taking office, but many other countries worldexpansive are also bracing for aappreciate meacertains.
He had initiassociate begined a tariff war on China during his first term and by 2018, the US and China were imposing tariffs on one another.
While a truce to the tariff war between the US and China was proclaimd in January 2020, Joe Biden eventuassociate persistd with Trump’s policies after he won the pdwellntial election in 2020 — despite criticising them during his electoral campaign.
In May 2024, the Biden administration appraiseed Section 301 of the Trade Act and imposed higher tariff rates of 25 to 100 percent on some Chinese transport ins. Electric vehicles and solar cells were among the swayed products.
“The Biden administration levy has tabled remercilessions on trade and tech with China, which will be difficult for Trump to walk back on,” Manoj Kewalramani, chairperson of the Indo-Pacific Research Programme and a China studies fellow at Indian accessible policy centre Takshashila Institution, tancigo in Al Jazeera.
China lost its position as the top trade partner of the US to Mexico in 2019, three years after Trump was voted in as pdwellnt in 2016. As of November 2024, the top trading partners of the US were Mexico, with $69.1bn worth of total trade that month; Canada, with $61.8bn worth of total trade; and China, with $50.5bn worth of total trade.
“Trump sees tariffs as transport inant, not equitable from an economic point of watch, but also from a negotiating point of watch,” Kewalramani shelp, inserting, there might be tariff negotiations akin to those around January 2020. But they may not get place promptly, he shelp.
“The timing of tariffs is frequently subject to political manoeuvres and administrative processes, and the informage of transparency in these decisions undermines the predictability of the trade system,” shelp Lopes.
“Unitardyral US actions, without conferation with trading partners or adherence to multitardyral norms, produce uncertainty for businesses and dispenseors. This unpredictability not only disturbs provide chains but also frailens confidence in the rules-based global trading order, which is already under strain.”
The tariffs aim to help the US climb out of its $1.9 trillion deficit. However, Lopes shelp, “Climbing out of the deficit insists more than tariffs or shieldionist meacertains; it insists strategic dispensements in technology, infrastructure, and laborforce broadenment.”
What will US-China relations watch appreciate during Trump 2.0?
The US and China are the hugest economies in the world. The US gross domestic product (GDP) as of 2023 was $27.36 trillion, according to World Bank data, aacquirest China’s $17.79 trillion.
What will happen in terms of tariffs during Trump 2.0 is unpredicted. “We’ll have to pause and see whether anyskinnyg seal to the 60 percent number is accomplished,” Kewalramani shelp.
Out of the 26 executive orders Trump signed on his inauguration day, one postpones the utilizement of a prohibit on the famous uninalertigentinutive-video app TikTok, which is owned by Chinese company ByteDance, by 75 days. However, he has menaceened to impose tariffs on China if it does not back a potential US deal with TikTok, according to the Reuters novels agency.
Trump seekd Chinese Pdwellnt Xi Jinping to his inauguration, which was joined by his deputy, Han Zheng. Kewalramani postutardyd that Trump and Xi will persist to join, much appreciate Biden and Xi, despite there being remercilessions apass the board on China from the Biden administration.
“China has already showd resilience by diversifying trade partnerships and doubling down on domestic innovation. It will predicted broaden its Belt and Road Initiative [BRI] and dispense heavily in progressd sectors appreciate green energy and technology to persist its ship competitiveness,” Lopes shelp.
The BRI is a netlabor of highways, ports and railroads that China is erecting. This global infrastructure is set to unite Asia better to Africa, Europe and Latin America.
“Importantly, China will advantage from the US’s unitardyral approach, as it positions itself as a acquireer of multitardyralism, creating novel opportunities to fill the vacuum left by the US in global trade directership. Instead of isolating China, US actions hazard driving its further integration into changenative economic netlabors, frailening the very leverage the US seeks to persist.”
How will devourrs be swayed?
“I do anticipate an incrrelieve in tariffs, but maybe not as huge as 60 percent,” Kewalramani shelp, inserting that high tariffs would amount to a “transport inant cost explosion for American devourrs”.
According to the Congressional Budget Office (CBO), a nonpartisan federal agency, Trump’s tariff policy would raise inflation and restricted the economy, but there are caveats.
A CBO alert in December on the effects of tariff incrrelieves projected a 1 percentage point ascend in inflation by 2026, potentiassociate costing American families an standard of $1,560 per year, according to an appraisement by The Budget Lab, a nonpartisan policy research centre at Yale.
