The trade between the two economies in the world, a link that has defined the world economy for 20 years, is to maintain life. China’s US tariffs are now 145%. China’s tariffs on the United States are now 125%. And it is just a standard that does not contain additional tariffs on certain products such as steel (in the US) or agricultural products (in China).
Yeling Tan, a public policy professor at Oxford University, said, “The tariff rate is now high enough to ban most direct quantum trade.
Even Beijing knows that this high tariff has no chance. “Considering that the US can no longer be sold in China, according to the current tariff rate, China will ignore such measures if the US raises tariffs on exports to China.” statement New 125%tariff announcement.
The tariffs were built by Chinese manufacturers from lawn chairs and Christmas ornaments to smartphones and semiconductors.
Washington and Beijing signaled that they were open to negotiations, even if there were no public signs. Each person thinks that someone needs to move first. Friday morning, CNN Reported Rather than requesting a call from XI, China demanded that China should call Trump instead.
The United States would have realized that China’s steep tariffs were impossible. Late on Friday, the White House exempted electronics such as smartphones, laptops and computer processors, including some of them imposed in China.
Customs and transactions
In 2024, the United States imported $ 430 billion worth of products from China, compared to exports to China worth $ 143.5 billion. Data from the US Census Bureau.
Trump’s 145% tariff on imports of China is only a baseline. There are 25%tariffs on steel and aluminum imports, and 25%of tariff threats in all countries using Venezuela oil. And the former executive for the Chinese family, solar panels and EVs has all the previous tariffs.
Beijing also hit additional tariffs on US products such as heavy equipment, oil, gas and agricultural products. Other non -marked barriers were also imposed. For example, on Friday, Chinese officials said they would do it. Reduce the number of American films China’s selection approval.
If the current situation continues (145%of tariffs on China, 10%of all others), both west and Chinese companies will accelerate the establishment of manufacturing hubs other than China in countries such as Vietnam, India and Mexico.
The problem is that Trump’s Trade Hawk wants to solve the strategy of “China”. Trump’s current “liberation” tariff hit high tariffs in countries such as Vietnam and Cambodia, in countries that have attracted China’s investment. Public officials, such as Trump Trade Advisor Peter or Peter Navarro, want the government to aim for China’s trade under tariffs.
Vietnam proposes to crack down on Chinese products traveling in territory as part of tariff negotiations with the United States. Reuters report Quotes government documents and unnamed sources.
Then Trump cannot reach a deal with a trading partner, and there is a risk of returning the “day of liberation” tariffs. TAN said, “A factory that has already shifted into a connector country will increase production to use pause, but new investments in the fear of tariffs on the” plus nation “can be small.
China’s steep tariffs also encourage US companies to export to the world’s second largest economy to consider diversifying their own supply chains. Friday, China Semiconductor Industry Association check The company did not need to pay tariffs on US chips and chip manufacturing equipment created in the third location.
China supports
Trump officials argue that China’s economy depends on US consumers, claiming that China is much more vulnerable to trade wars than the United States. If the United States closes, China will have no one to sell and the economy will collapse.
The White House also argued that Trump’s suspension of tariffs was an intentional strategy to isolate China, and argued that negotiations on other worlds were held. Scott Bessent, the finance minister, told reporters on Wednesday. He also proposed the US and allies. You can work together Press China on trade.
In fact, China depends on the United States over the first Trump administration. Less than 15% of China’s exports decreased directly to the United States from about 19% in 2018. Beijing also cultivated alternative sources imported from the United States, such as agricultural products such as Brazil and Australia. For the past two months, the export of beef beef in Australia Already 40% increase Compared to the previous year.
Brown said, “There is an option in China.” China’s largest trade partner is now Southeast Asia. “I don’t see the United States once.”
Obviously, economists expect China to be hit by Trump tariffs, and banks city and Goldman Sachs We have reduced the 2025 GDP forecast for the second largest economy in the world.
But Beijing is in a bold position in the fight against the United States, and the spokesman said that if the United States continues in the trade war, China will fight to the end.
Except for the posture, Beijing can be in a safer position than the US Trump’s trade war has already fallen in the stock market, hikes bond yields, and calms the US dollar. This is before the inflation effect of the tariff is in earnest.
DEXTER ROBERTS, a non -resident fellow of the Atlantic Council of Global China Hub, said, “Chinese people feel as if they can eat bitterness, referring to Chinese phrases that mean patience, which means that they will be blinking. I think it will be. ”
Roberts added that at least the first trade war did not actually end in Beijing’s point of view. The BIDEN administration maintained Trump’s initial tariffs on Chinese products. BIDEN also imposed his tariffs, such as 100% tariffs on the Chinese EV, and was aimed at China’s technical sectors by prohibiting exports of US chips through more annoying work.
This means that Beijing has been on the basics of trade war since 2016. China has established a trade relationship with other markets, found a new source to replace US products and invested in its own technology companies. TAN said, “China has been preparing a world with little access to the US market for many years.
And trade wars are painful, but they can accelerate other priorities in Beijing. Roberts said, “In a strange way, Beijing’s long -term goals are suitable for shifting the economy from the dependence on the West and the export.
Nevertheless, China cannot easily convert export markets to other regions such as Europe, the Middle East or Southeast Asia. First of all, these areas of developed countries such as Europe do not have the same consumption potential as Americans. Then there is a risk of Blowback. TAN warns that these countries are facing a surge in China’s imports in the US market.
Is there no deal or deal?
Economists agree that it will be very painful for both countries to completely separate between the United States and China. IAIN OSGOOD, an international relationship professor at the University of Michigan, says more than 100% of tariffs are “absolutely punished.” “There are many businesses that could not survive at all in the United States. Even big retailers will struggle.”
In the end, both sides will try to find a way to expand things again. Otherwise, the United States can unilaterally roll back a part of tariffs when pain begins. Nevertheless, tariffs are likely to not go back to the level before 2018 and before 2024. OSGood believes that tariffs can probably return to more “wise” levels between 15% and 30%.
But the rapid expansion of the US trade war raises an uncomfortable question. What does the world look when the two greatest economies refuse to deal with each other?
The world where Beijing and Washington cannot withdraw can be dangerous. Roberts says that business relationships caused by the existence of the company and foreign citizens say, “It affects the splendor,” even if the idea is actually played excessively. “If you are increasingly isolated and there is no business relationship … the possibility of conflict will definitely go up.”
TAN said, “At the end of the day, the fate of two huge economies will be intertwined. The collapse of direct quantum trade will harm the business and consumers of both countries.
“It will be a much more fluctuating world.”
This story was originally on Fortune.com.
