Trump fires new customs shot against China - does the trade war begin?

Trump fires new customs shot against China - does the trade war begin?

President Donald Trump has redeemed his promise from the election campaign and increased the tariffs to Chinese imports. On Saturday, he announced a customs fee of 10% to all Chinese goods that are imported into the USA, within the framework of extensive trade measures that also affect Mexico and Canada. Now the question arises how strongly the Chinese leadership will repel.

China's reaction to the new tariffs

After the announcement of the customs increase, Chinese officials who were hit during a week -off public holiday swore to submit a complaint to the World Trade Organization (WTO) and to take appropriate countermeasures without exactly indicating in what form. The Chinese Ministry of Commerce declared on Sunday that the introduction of a 10% customs to Chinese goods that are imported into the USA "violates the WTO rules" and added that China would "defend his rights".

a less specific reaction than Mexico and Canada

The reaction of China has so far been remarkably less specific than that of Mexico and Canada, both of whom promised quickly, to react quickly with their own tariffs. In contrast to China, where the new tariffs build on existing fees on a variety of goods, Canada and Mexico had previously enjoyed an almost duty -free relationship with the USA. However, there are additional reasons that could explain the comparatively mild reaction of the world's second largest economy.

China's strategy in the trade relationship with the USA

Beijing has experienced an unexpectedly warm start in Trump's second term of office, which is a welcome development for Chinese leadership, since she wants to try not to escalate the trade and technology conflicts- especially in view of the weakening export-dependent economy. China's head of state Xi Jinping had made a phone call described as "very good" shortly before Trump's takeover, and during the inauguration the highest Chinese representative who has ever attended such an event was present.

The way to a trade agreement?

The 10% tariffs are far from the more than 60% that Trump indicated during the election campaign that he could raise them on Chinese goods. Trump has linked these tariffs, at least rhetorically, with the role of Chinese suppliers in fentanyl trade and not with the enormous level of trade between the USA and China. Expectations within China indicate that Trump may wait until he receives the results of a more comprehensive investigation into the US Chinese economic and trade relationships, which he commissioned on his first day of office in an executive arrangement.

look into the future: trade conflicts and measures

The review carried out on the basis of Trump's arrangement, which is due on April 1, will probably decide whether the White House raises further tariffs against China. In the meantime, Beijing has time to build a relationship with Trump, to receive it in the Chinese capital or to demand a preventive deal in order to avert more economic sanctions. In this regard, the message of the Chinese leadership broadcast a conciliatory tone.

China's economic preparations

Analysts within China have downplayed the effects of the 10% tariffs, as part of a broader debate, whether it would make sense for China to escalate a trade war as in the first term. In 2018, Trump increased or re-introduced the tariffs to hundreds of billions of Chinese imports to the USA, according to which Beijing responded with its own tariffs of around $ 185 billion. The bid administration kept these tariffs largely upright, while it focused on its own trading strategy known as "small cave, high fence".

conclusion and outlook

china has already taken steps to shield itself from the effects of the tariffs that Trump himself described as potentially painful for the Americans. According to the US government's data, the United States imported $ 401 billion from China last year, with a trade deficit of over $ 270 billion in the first eleven months. Chinese state media reported that exports to the United States only make up 3% of the country GDP and less than 15% of China's total exports.

Finally, the question is whether China will announce further trade counterparts in the coming days. However, their initial response to 10% inch and the formulations in the past few weeks indicate that it may remain in a downward way before it goes deeper into the instrument case of its retaliation.