China immediately retaliated with its own tariffs after the U.S. imposed a 10% tariff on all Chinese goods. China announced tariffs ranging from 10% to 15% on certain U.S. products, such as coal, liquefied natural gas, and crude oil. This escalation of trade tensions raises the risk of a spiraling trade war between the two largest economies in the world.
The Chinese government criticized the U.S. for violating World Trade Organization rules and stated that the tariff hike does not solve any problems but instead hinders economic cooperation between the two countries. Aside from tariffs, China also initiated an investigation into Google for alleged anti-trust violations and imposed export controls on items crucial for high-tech products.
Trump had also announced tariffs on goods from Canada and Mexico, but those tariffs were paused for 30 days after talks with the countries’ leaders. No deal has been reached with China, although Trump is expected to speak with Chinese leader Xi Jinping in the coming days. China has referred the U.S. tariff measures to the World Trade Organization to protect its rights and interests.
The escalation of tariffs has severe consequences for the global trading system, with China accusing the U.S. of undermining multilateral trade rules. The ongoing trade dispute between the two countries, compounded by existing tariffs from Trump’s first term that have been maintained or expanded by Biden, has the potential to disrupt global industrial and supply chains.
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