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| China retaliates against Trump's tariff hike with new trade measures, escalating the U.S.-China trade war. [gettyimages] |
The ongoing trade war between the United States and China has reached a new level of intensity as both economic giants impose fresh rounds of tariffs on each other’s goods. In response to President Donald Trump’s decision to double tariffs on all Chinese imports to 20%, China has retaliated with tariffs of up to 15% on key American exports, including agricultural and technological products. Beijing has also expanded its export controls and placed additional U.S. firms on its "unreliable entity" list, signaling an aggressive stance against what it calls "U.S. bullying."
China's countermeasures target critical American industries, particularly agriculture and technology, which are vital to the U.S. economy and key support bases for Trump. Beijing’s new tariffs include a 15% duty on wheat, corn, cotton, and chicken, along with a 10% levy on soybeans, pork, beef, and dairy products. China was the top market for U.S. agricultural exports in 2023, making these measures particularly impactful on American farmers, who overwhelmingly supported Trump in the last election.
In addition, China’s Ministry of Commerce has placed 15 U.S. companies on its export control list, including drone manufacturers Skydio and AeroVironment, as well as biotech firm Illumina, which is now barred from exporting gene sequencers to China. The imposition of anti-dumping duties on U.S. optical fiber firms, with rates ranging from 33.3% to 78.2%, further escalates the trade battle.
The trade war has broad economic ramifications. A study by Cornell University economist Wendon Zhang estimates that Trump's tariffs could lead to a 0.4% loss in U.S. GDP, translating to over $100 billion in economic damage. Meanwhile, China, already grappling with economic slowdowns, high youth unemployment, and a property sector crisis, faces additional financial strain. However, Beijing appears determined to hold its ground, leveraging nationalistic rhetoric and portraying Washington as a destabilizing force in global trade.
China’s leaders are also using the annual "Two Sessions" parliamentary meeting to showcase confidence in their economic resilience. The focus remains on advancing the country’s technological self-sufficiency, particularly in artificial intelligence, quantum computing, and green technologies. Analysts suggest that U.S. economic pressure may actually accelerate China’s push for innovation and industrial independence.
Despite its hardline rhetoric, Beijing has left room for negotiation. Unlike in 2018, when China imposed a steep 25% tariff on U.S. soybeans, this time, the retaliatory tariffs remain below the 20% threshold, signaling a strategic rather than an all-out economic confrontation. Chinese officials have repeatedly called for dialogue, but with Trump showing no signs of backing down, the likelihood of de-escalation remains uncertain.
A White House call between President Trump and Chinese President Xi Jinping had been planned but never materialized. With neither side willing to make the first move toward conciliation, the world’s two largest economies are edging closer to a prolonged and potentially more destructive trade conflict.
For now, Beijing is focusing on rallying international support while highlighting Trump’s aggressive economic policies. Chinese state media has released content mocking the U.S. for taxing both allies and rivals alike, portraying Washington as an unreliable partner.
The escalating trade war between the U.S. and China is shaping up to be one of the defining global economic challenges of the decade. While both nations stand firm in their positions, the growing economic toll on industries, businesses, and consumers worldwide may ultimately force a shift in strategy. As China vows to “fight till the end” and Trump remains steadfast in his tariff policies, the coming months will reveal whether diplomacy can prevail or if the trade war will spiral into an even deeper economic standoff.