BEIJING (Reuters) – China passed a law on Friday that leaves its major trading partners in no doubt that it can retaliate if they impose tariffs on exports from the world’s second-largest economy, as Washington and Brussels are attacking Beijing for its excess industrial capacity. .
The tariff law, which was approved by China’s top legislature after three rounds of deliberations dating back to 2022, is the latest addition to Beijing’s arsenal of trade defense instruments as it maintains an uneasy truce with the United States following a trade war that began during the same period. Trump administration.
The law, which takes effect Dec. 1, outlines a series of legal provisions related to tariffs on Chinese imports and exports, from what constitutes tax incentives to China’s right to retaliate against countries that waive to their trade agreements.
Beijing has strengthened its trade defense capabilities since President Xi Jinping came to power in 2012, introducing laws giving authorities means to retaliate against countries that challenge the way China trades by interfering with the flow of goods , data and personnel between these countries. markets.
Growing tensions between China, the United States and the European Union have only confirmed Beijing’s belief that it must consolidate and improve the measures it has, analysts say.
“It’s like a nuclear weapon: the purpose of having it is not to use it, but to deter others from using it against you,” said Henry Gao, a professor at Singapore Management University.
“One could argue that this is not really necessary, because when China improved its foreign trade law in 2004, steps were taken to apply retaliatory tariffs,” Gao added.
“But I think one point China is trying to make by including this in the new tariff law is that it’s our prerogative: If you want to impose tariffs on us, we can do the same.”
Growing concern over Chinese industrial overcapacity flooding the European Union with cheap goods opens a new front in the trade war between the West and Beijing, which began with tariffs on imports imposed by Washington in 2018.
Brussels is currently studying whether to apply customs duties on Chinese electric vehicles, while Beijing is carrying out its own anti-dumping investigation into European brandy.
(Reporting by Joe Cash, Ellen Zhang and Ryan Woo; editing by Muralikumar Anantharaman and Michael Perry)
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