US President Donald Trump ratcheted up a trade war with China after he hiked the tariff on Chinese imports to 125% from the 104% that kicked in on Wednesday.
In a social media post, Donald Trump said he was pausing his so-called “reciprocal tariffs” on many other trading partners because they had responded by reaching out for talks rather than retaliating. He blamed China for a “lack of respect.”
Beijing also responded in kind, slapping 84% tariffs on US imports on Wednesday to match Trump’s earlier tariff salvo. Since taking office in January, Trump has raised the tariff on Chinese goods five times.
Here’s what China could do next
China has repeatedly vowed to “fight to the end” in the escalating trade war between the world’s top two economies.
It also said it had filed a complaint with the World Trade Organization (WTO), citing “bullying” tactics by the Trump administration.
Also Read | Why did Donald Trump raise US tariffs on China to 125% and hit pause elsewhere?
Zhiwei Zhang, chief economist at Pinpoint Asset Management, told AFP that China had sent a “clear signal” that it would not back down, adding that there was “(no) quick and easy way out” of the conflict.
According to a report by Sky News, China could further control the export of rare earth minerals. These minerals are used in high-tech products such as computer chips and electric vehicle batteries. China controls a huge proportion of the world’s supply of rare earth minerals.
It could also hike tariffs on high-impact products such as agricultural goods and target high-profile American companies such as Apple and Tesla. However, the latter is tricky as China is trying to attract more foreign investment, according to the report.
According to the report, Beijing could also consider banning the import of American films or boycotting all American products.
Earlier, a weekend editorial in the Communist Party-backed People’s Daily had described the tariffs as a “strategic opportunity” for China to cement consumption as the main driver of economic growth, according to AFP. We must “turn pressure into motivation”, it read.
