Beijing Vows to Retaliate on Trump’s 104% Tariff on China
China has promised to take resolute and effective measures to safeguard its rights and interests in the current US-China trade war after US President Donald Trump’s 104% tariffs on Chinese imports took effect on Wednesday.
“The United States is still imposing arbitrary tariffs on China and relentlessly applying extreme pressure. China firmly opposes and will never accept such domineering and bullying behavior,” Chinese Foreign Ministry spokesperson Lin Jian told a regular news conference.
“If the US disregards the interests of both countries and the international community and insists on waging a tariff war and trade war, China will fight to the end,” Lin added.
US levies on Chinese imports had been set to increase by 34% on Wednesday as part of Trump’s “reciprocal” tariffs package. But the president tacked on another 50% after Beijing didn’t back down on its promise to impose 34% retaliatory tariffs on US goods by noon Tuesday.
“The legitimate right to development of the Chinese people cannot be deprived, and China’s sovereignty, security, and development interests cannot be infringed upon,” Lin said.
US-China Trade War
The tariffs come at a difficult time for China’s sluggish economy –domestic consumption remains weak and exports are still a major driver of growth.
The sweeping nature of Trump’s tariffs has also left Chinese businesses scrambling to adjust their supply chains – with most countries affected, firms say it’s hard to find a way out of this uncertainty.
Any tariff upwards of 35% will wipe out all the profits that Chinese businesses make when exporting to the US or South East Asia, said Dan Wang from the Eurasia Group consultancy.
“Growth is going to be much lower since exports contributed to 20% to 50% of growth since the Covid pandemic,” she added.
The Chinese government has not announced retaliatory measures but Beijing is reportedly considering banning Hollywood films and suspending fentanyl cooperation with the US, according to Chinese blogger Liu Hong, who is a senior editor at state-run Xinhua news.
Trump’s new tariffs have introduced more uncertainty for Chinese exports from Indonesia that are now subject to a 32% levy, the company said in a corporate filing.
Indonesia was hit along with much of the world in President Trump’s announcement of expansive tariffs last week, which he claimed would allow the US economy to flourish. However, economists have warned of a US and global recession.
The tariffs have also shaken global markets and drawn criticism from billionaire CEOs, including Trump’s ally Elon Musk.
Trump’s import taxes include a 10% baseline tariff on almost all foreign imports to the US, and higher custom tariffs for what he calls the “worst offenders”. These include Cambodia (49%), Vietnam (46%) and Thailand (36%), developing economies that have benefited from strong exports.
After Beijing announced tit-for-tat tariffs, Trump raised the levies on Chinese imports, more than doubling them to 104%.
Such broad, sweeping tariffs will cause more harm than good, the American Chamber of Commerce in China said in a note to its member companies on Wednesday.
Some analysts believe the levies will force China to restructure its economy and rely heavily on domestic consumption, which it has been struggling to boost.
Otherwise, the tariffs will not be sustainable for China in the longer term, Tim Waterer from brokerage KCM Trade said.
“The tariffs are aimed at suppressing China,” said the manager of a Chinese freight company.
Wu Changchun added that many of the South East Asian countries that have been hit with steep tariffs are “exactly where many Chinese businesses have relocated”, such as Vietnam and Cambodia.
Several construction projects in Cambodia have also come to a halt after Trump’s tariffs announcement, he said.
