The Chinese government has raised tariffs on thousands of US goods entering the country. This is part of Beijing’s response to escalating trade tensions with the US. China also accused the White House of trade bullyism and putting the global economy at risk. The Chinese General Administration of Customs said that it has already begun collecting additional taxes ranging between 5% and 10% on $60 billion worth of US goods. The move comes barely days after President Donald Trump announced similar tariffs on $200 billion worth of Chinese exports to the US. It’s not clear how much the US is collecting as tax on Chinese goods but it’s very likely that the percentages are the same as the ones imposed by China.
Trade tensions between the US and China have been on the rise over the last few months. The two countries had already targeted each other with 25% levies on goods worth $50 billion before the escalation this month. The US has accused China of bad trade practices and stealing proprietary technology from US companies but China has always denied these allegations.
It’s also emerging that Beijing has pulled out of the proposed talks that were designed to iron out these differences. The round table talks had been proposed by the White House with the aim of averting a further escalation in trade tensions. Beijing has accused the US of deliberately abandoning mutually agreed mechanisms to diffuse the tensions. China is also calling out the US for “preaching unilateralism, protectionism, and economic hegemony against many countries.”
Economists have already warned that there won’t be any winners in a trade war between the US and China. But the biggest worry right now is that this escalation may affect other countries too in the global economy. Companies in both sides of the Pacific are already starting to feel the pinch, and their operations have already been distracted as a result of the trade war.
The trade tensions have also sabotaged any hope of normalizing relations between the two countries. A few days after his election, President Trump expressed optimism after a visit to China that the US was committed to engaging bilaterally with Beijing in order to deal with common pool challenges faced by both nations. Trump was also pushing for greater economic integration between the two countries. There was hope at the time that this could mark an important step to improving relations but so far it seems thing have fallen apart.
Recent reports are also indicating that the Chinese government has suspended any military talks with Washington after the US moved to sanction a Chinese military agency for buying Russian fighter jets. China is also expanding its presence in disputed territories in the South China Sea with man-made islands fully equipped with military bases sprouting up. The US has expressed concern over these developments noting that they are a direct threat to its allies in the region. But so far the trade tensions are making all the headlines. If they continue, economists warn that the consequences could be dire for everyone.
