Trade war takes another twist amid Trump’s tariffs 

US President Donald Trump’s decision to impose 10% tariffs on goods from China has been met with mixed reactions from Beijing.

The Chinese government has threatened to roll out countermeasures with businesses expressing concerns about potential disruption to their exports to the US market.

While the Chinese Ministry of Commerce vowed to challenge the Trump administration’s move at the World Trade Organization, the foreign ministry went even further in its condemnation:

[Trade and tariff wars] cannot solve the US problems at home and more importantly, does not benefit either side.

Fentanyl production

Trump previously said the additional tariffs on Chinese goods were Washington’s response to its role in manufacturing precursor chemicals essential to fentanyl production in Mexico. A Chinese foreign ministry spokesperson said in a statement at the weekend:

Additional tariffs are not constructive and [are] bound to affect and harm the counternarcotics cooperation between the two sides in the future.

There was also a tone of defiance on China’s social media platform Weibo. Some internet users said the Trump administration’s move would only backfire and harm American consumers’ interests. Others said Washington’s response “lacks creativity.”

“In the end, he only dares to add 10% tariffs [on Chinese goods] while imposing 25% tariffs on goods from other countries,” wrote Chinese internet user “Jixiang Wang-bao” on Weibo.

Compared to the anger expressed by internet users, the country’s exporters are concerned that additional tariffs will harm their businesses. One Chinese consumer electronics exporter, who asked to only be identified by his last name Lin, told Voice of America in a written response:

The additional tariffs will essentially force my company to give up the US market and shift the focus to other countries.

Hu Xijin, the former editor-in-chief of China’s state-run Global Times, said that while exporting to the US would pose challenges, the economy was capable of dealing with the impact of tariffs.

“All parties in China have long anticipated this round of tariff hikes imposed by Trump and relevant businesses in China have made a lot of preparations,” he wrote in a post on Weibo.

He added that the Trump administration’s trade war against China would ultimately harm American consumers and suppliers.

Sluggish economy

Still, analysts pointed out that Washington’s decision to start with a 10% tariff shows the US willingness to negotiate with Beijing. Wu Se-chih, an expert on Chinese politics at Taipei University of Marine Technology, said:

The Trump administration may use the 10% tariff as a way to push Beijing to reach deals on issues important to the US, such as the fentanyl crisis, and show China’s government that it could further increase the tariffs to 60% if [it] is unwilling to engage in negotiation.

Since the Chinese economy remains sluggish, Wu said Beijing is trying to respond to Trump’s tariffs with less confrontational measures such as filing a claim with the WTO.

“China is hoping to show Washington it is willing to come to the negotiating table to prevent the Trump administration from further tariffs on Chinese goods,” he told VOA by phone.

Other experts say that the lower duties that Washington has imposed on China, compared to the 25% on goods from Mexico and Canada, suggest Beijing may have begun talks. Alicia Garcia-Herrero, the chief economist for Asia Pacific at investment bank Natixis, told VOA:

China could announce a massive order from Boeing or China could announce a massive increase in imports of shale gas, which could be very useful for Trump.

While China might be more prepared to cope with tariffs after Trump’s first term in office, some economists said they could still seriously affect China’s economic growth. He Jiangbing, an independent Chinese economic commentator, told VOA by phone:

The Chinese economy will still be hit hard by the additional tariffs imposed by the Trump administration because China has been relying on exports to drive economic growth.

Trade imbalance

Garcia-Herrero, of Natixis, said while Trump begins his second term by imposing additional tariffs, the trade imbalance will not be the main source of tension between Beijing and Washington during the next four years:

Escalation of tension between China and the US will come from important national security issues such as Taiwan and the US military deployment in the Philippines.

William Yang is a correspondent for Voice of America based in Taiwan.

This edited article is republished courtesy of Voice of America. Read the original article here.

The views and opinions expressed in this article do not necessarily reflect the official policy of China Factor.