US President Donald Trump has announced a 90-day pause for global tariffs, but increased levies on Chinese imports to 145%, leaving the future of trade relations between the two nations uncertain.
China Urges US to ‘Completely Cancel’ Tariffs in Ongoing Trade War
The ongoing trade war between the US and China has taken a new turn, with Chinese officials urging US President Donald Trump to ‘completely cancel‘ his reciprocal tariffs. The latest development comes as Trump announced a 90-day pause for a host of global tariffs he had planned, but increased levies on Chinese imports to 145%.
The US-China trade war refers to a series of tariffs and counter-tariffs imposed by the two countries on each other's goods.
The conflict began in 2018, with the US imposing tariffs on Chinese imports worth $50 billion, citing intellectual property theft and unfair trade practices.
China retaliated with its own tariffs on US goods.
According to the World Trade Organization (WTO), global trade has been significantly impacted by the ongoing dispute, with a decline in international trade volumes.
The Reciprocal Tariffs: A Root Cause of the Trade War
The use of reciprocal tariffs has been a contentious issue in the trade war between the US and China. The Trump administration has argued that it is using tariffs as a negotiating tactic to extract more favorable trade terms from other countries. However, this approach has seen massive fluctuations in the stock market and raised fears of a decrease in global trade that could have a knock-on effect on jobs and individual economies.
A Small Step Forward: Exemptions for Technological Products
In a move that offered hope for tech giants and consumers, the Trump administration announced exemptions for certain technological products, including smartphones, computers, and semiconductors. This development was welcomed by China’s commerce ministry, which described it as a ‘small step‘ in the right direction.
The US-China trade exemptions refer to temporary waivers granted by the United States to certain Chinese products from tariffs imposed under Section 301 of the Trade Act.
These exemptions allow imports to enter the US market duty-free, providing relief to businesses and consumers.
The exemptions are typically time-limited and subject to change based on ongoing trade negotiations between the two nations.
As of 2022, over $120 billion worth of Chinese goods have been exempted from tariffs, including electronics, machinery, and textiles.
However, despite this positive development, there is no immediate prospect of a thaw in the two rival nations’ protectionist posture. US trade representative Jamieson Greer stated that there are currently no plans for Trump to speak with his Chinese counterpart, Xi Jinping.
The Impact on Global Trade
The ongoing trade war between the US and China has significant implications for global trade. The imposition of tariffs can lead to a decrease in imports and exports, which can have a knock-on effect on jobs and individual economies. A US-China trade war would also have far-reaching consequences for the world economy, including potential fluctuations in the stock market.
Global trade has experienced significant growth over the past few decades, driven by advances in technology, transportation, and communication.
The World Trade Organization (WTO) reports that global trade volume increased from $4 trillion in 1990 to over $22 trillion in 2020.
This expansion has led to increased economic interdependence among nations, with countries trading goods and services across borders.
Key drivers of global trade include the growth of emerging markets, such as China and India, and the increasing importance of international supply chains.
A Call to Action: Will Trump Cancel the Tariffs?
Chinese officials are urging the US to take a big step to correct its mistakes by ‘completely canceling‘ the reciprocal tariffs. The Chinese commerce ministry stated that Beijing is ‘evaluating the impact‘ of the exemptions and is calling for a return to the right path of mutual respect.
As the trade war continues, it remains to be seen whether Trump will heed China’s call to cancel the tariffs. Will this move mark a significant shift in the US-China relationship, or will it remain a contentious issue? Only time will tell.
