Sino- US trade relations strained as China raises tariff on US goods


Sino- US trade relations strained as China raises tariff on US goods

Trade relations between China and USA have further hit rock bottom as China, on Saturday, raised tariffs to maximum 25 percent on billions worth of US goods. 

As per an official statement by the Customs Tariff Commission of the State Council, the new tariff will range between 10 % -25 %. The list of goods includes sports equipment, beauty products, condoms, diamonds, musical instruments, wood, wine, toys and fabric.

Retaliatory measure

This step is said to be taken in response to the additional tariff imposed by the Trump administration on $200 Billion Chinese goods from 10 per cent to 25 percent. As a result of the tariff hike, the export of agricultural products from China to the US shrank by a huge margin.

The US China trade is undergoing a massive trade deficit with China’s export totaling 539 billion USD and US exports totaling 120 billion USD. This deficit is having an impact on the economies of both the countries as business industries reliant on the concerned commodities are suffering.

Sino- US trade relations strained as China raises tariff on US goods

Chain of events

There has been a series of events intensifying the trade war between the two nations.

Recently, Chinese tech giant Huawei has been blacklisted by the US and has been banned from doing business with US firms. As a result, Huawei, the second largest smart phone maker in the world may have restricted or no access to components from US companies for its products and services. These may include some key Google android Software which would impact the smartphone shipments and it may have to find alternate sources for the same. The ban may also hinder Huawei’s development process of 5G network as it requires components made by American firms like Skyworks.

In response to the Huawei ban, China said it would release a blacklist of its own of unreliable foreign companies and individuals and stop business with them. It also said that it is considering stopping the export of rare-earth metals to the US. These are a key component of I phones and hi-tech missile guidance systems in America. In the past few years US has imported more than 50% of rare Earth compounds from China. If China resorts to strict measures, US might have to look for alternate measures.

Before that China took a huge step of putting US Soy buying on hold as a result of the tariff war. China is world’s largest soya bean buyer. Restricting soya bean imports from the US might not affect China as much as it would affect the US farmers. As per a Chinese policy maker’s statement, China could find ways to diversify its soy production and look for import from other countries. However, it might be difficult for US farmers to regain the Chinese market once lost.

Way forward

With several conflicts rising between the two nations, potential solution is nowhere to be seen in near future. However, leaders of both the nations, Donald Trump and Xi Jinping are expected to meet for the G20 Summit in June end. It is hoped that both the countries are able to reach a trade consensus during the meet.

Author Biography– Saloni Jain is a freelance content writer with an extensive experience in health, fashion,travel and lifestyle. She herself enjoys exploring new places and cultures.She firmly believes that unbiased and unprejudiced writing is a very good medium to connect people from almost any background.


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