After US President Donald Trump suspended his “reciprocal prices” on the main American trade partners on April 9, he increased them on Chinese goods. American commercial levies on most imports from China has increased to 145%. Beijing retaliated with its own tasks, 125% on American goods.
Trump has long been accused of China of exploiting the United States on trade, throwing its prices as necessary to revive national manufacturing and raising jobs in the United States. He also wants to use prices to finance tax reductions. Most economists remain skeptical that Trump will achieve his goals.
For the moment, the United States and China are locked in a high chicken game. The world is waiting to see which country will give in and which will remain the course. While Trump approaches his first 100 days in power for the second time, this is where the tariff war is located with China:
What’s going on with negotiations?
Trump recently played the possibility of concluding a trade agreement with China. Last week, the American president said that his prices on China “will drop considerably” in the near future.
“We are going to have an equitable agreement with China,” Trump told journalists on April 23, arousing hopes of a de -escalation. He also said that his administration had “actively” negotiated with the Chinese side without developing.
On April 24, however, the Chinese trade ministry postponed the remarks of President Trump, saying that there were no talks that took place between the two countries.
“Any complaint on the progress of the economic and commercial negotiations of the United States China is baseless and has no factual basis,” said the ministry spokesperson, there is.
Although he insisted that Beijing does not repel the economic blows of Washington, he also said that the door was “wide open” for discussions.
Last week, the reuters news agency said that China estimated the exemptions for certain American imports – a list of 131 products.
Beijing made no public statement on the issue.
Has the tariff war had an impact on American exports?
Trump presented his radical prices on China less than three weeks ago. The repercussions for American companies will not be fully felt later this year. However, warning signals are already flashing in red.
Data from the American Department of Agriculture show that soy exports – the largest export of the American farm – have decreased dramatically for the period from April 11 to 17, the first full week of reporting since the announcement of the Trump China price.
On April 17, the net sales of American soybean beans fell 50% compared to the previous week. This has been motivated by a 67% drop in weekly soy -to -soy -to -go, which until recently, was the largest export destination in America for legumes.
According to Piergiusppe Fortunato, auxiliary professor of economics at the University of Neuchatel in Switzerland, “the prices of reprisal in China strike the American farmers. Some could make their doors. ” He added that all the sectors exposed to China would be under tension.
In 2023, the United States exported around $ 15 billion in oil, gas and coal to China. Losing this market would strike American energy companies.
Will imports to the United States take a hit?
Since the start of Trump’s pricing war, freight shipments have dropped. According to Linelytica, a supplier of shipping data, Chinese freight books to the United States dropped from 30 to 60% in April.
The drastic reduction in the expeditions of the third American trade partner – after Canada and Mexico – has not yet been felt. In May, however, thousands of companies will have to restore their stocks.
According to Bloomberg News, the retail giants Walmart and Target told Trump at a meeting last week that buyers are likely to see empty shelves and higher prices compared to next month. They also warned that supply shocks could be deployed at Christmas.
Electronic devices, such as televisions and washing machines, represented 46.4% of American imports from China in 2022. The United States also imports a large part of its clothing and ingredients of pharmaceutical product from China. The price of these goods will begin to increase compared to next month.
On April 22, the International Monetary Fund increased its inflation forecasts in the United States to 3% in 2025, due to prices – a full point of 1 more than in January. The lender also lowered his forecasts for American economic growth and raised his expectations that the United States will tip the recession this year.
How will the Chinese economy be affected?
Despite growing tensions between the United States and China, Washington and Beijing remain large business partners.
According to the office of the American commercial representative, the United States imported $ 438.9 billion into Chinese products last year.
This represents around 3% of the total economic production of China, which remains strongly dependent on exports.
In a relationship shared with his clients this month, Goldman Sachs said he expects Trump prices to lead up to 2.4 percentage points.
For their part, senior Chinese officials said the country could do without American farm and energy and promised to achieve a 5% GDP growth target for this year.
Zhao Chenxin, vice-president of the National Development and Reform Commission, said that with non-American imports, national production and energy production would be sufficient to meet demand.
“Even if we do not buy food and oil seeds in the United States, this will not have much impact on cereal supply in our country,” Zhao said on Monday.
He also noted that there would be a limited impact on China’s energy supplies if companies stopped importing American fossil fuels.
In some respects, experts said, China has prepared for this crisis.
Fortunato told Al Jazeera: “The United States is one of the largest export markets in China, so the prices will slow the growth of GDP. But Beijing played it intelligently when it was starting to diversify its imports from the United States during the First Trump Trade War in 2018.
He also pointed out that “the United States depends on China for up to 60% of its critical mineral imports, used in everything, of military technology. The opposite flow is simply not there, so the United States is more vulnerable. ”
Could the United States lose its geopolitical position?
Trump has little secret of his wish to constitute American allies in a trade war. The administration said it aims to conclude free trade agreements with the European Union, Great Britain and Japan.
More generally, reports suggest that Washington asks the business partners to loosen their economic ties with China as a prediction to obtain relief of Trump’s “reciprocal” prices.
Nevertheless, the American allies seem largely opposed to any economic confrontation with China. Last week, the European Commission said it did not intend to “decouple” China.
Elsewhere, the British chancellor of the chessboard Rachel Reeves recently declared to the newspaper Daily Telegraph: “China is the second greatest economy in the world, and that would be, I think, very stupid not to commit.”
Many countries are unable to abandon their business links with Beijing. The EU, in particular, has a huge trade deficit with China. Cut access to Chinese goods – consumer products and industry inputs – died its already slow economy.
In the developing world, the commercial role of China is just as crucial. About a quarter of imports from Bangladesh and Cambodia come from China. Nigeria and Saudi Arabia also depend on Beijing for their imports of goods.
“It is difficult to see why countries would like to undermine their own commercial interests to try to reduce America’s trade deficit with China,” said Fortunato. “On this point, I think Trump was myopic and may be forced to flash first to reduce prices with China.”
Does Trump lose his grip on republican voters?
The Chinese Communist Party does not need to worry about its next electoral cycle. Trump’s republican party does it, so Beijing has the political overhead in the Trump trade war. In other words, he has more time on his side.
For Trump’s party, his saber click already seems politically expensive. A new economist-Yougov survey shows that the Americans reporting that Trump’s economic actions have personally injured them more than they have helped by a 30-point margin.
And the public approval of the president’s economic management has been low for some time: it had fallen at 37% in a Reuters-Ipsos poll published on March 31, its lowest score of this survey.
If Trump remains the course, it is likely that his approval ratings could drop again, compromising the fragile hold of the Republican Party in the House of Representatives of the United States-and perhaps the Senate, said experts.
“For these reasons,” said Fortunato, “China does not feel forced to rush to the negotiating table to conclude a trade agreement. This will likely fall to Trump.”
