US President Donald Trump said on Tuesday that he is considering imposing 10 percent tariffs on imports from China, which could take effect on February 1.

It was Trump’s latest trade threat against China, the world’s second-largest economy after the United States, and Washington’s biggest geopolitical rival. During the campaign that ultimately led to his re-election, Trump threatened to impose tariffs of up to 60% on Chinese goods, intensifying the ongoing trade war.

However, if the proposed tariffs were intended to harm Chinese exports, in an attempt to advance US interests in its trade relations, Trump’s threats – at least so far – appear to have had the opposite effect.

China’s total exports, including to the United States, have grown in recent months.

So why is Trump threatening China with tariffs, how do Chinese exports continue to increase, and what is the next step in their trade conflict?

Why does Trump threaten China with increased tariffs?

On Tuesday, Trump said China was behind the supply of fentanyl to US neighbors, which he said was also responsible for a deadly addiction crisis in the country.

The day before, he said he was considering imposing 25% tariffs on Mexico and Canada, claiming the two countries were allowing “large numbers of people” and fentanyl into the United States. He also announced the creation of the “Foreign Revenue Service” that would “collect customs tariffs, duties, and all revenues coming from foreign sources.”

As 2024 draws to a close, Chinese exports US corporate revenues rose 4 percent between November 2023 and November 2024.

But more broadly, Trump has also accused China of unfair trade practices. China, the world’s largest exporting country, enjoys a huge advantage in the balance of trade with the United States. In the first eleven months of 2024, Chinese exports to the United States totaled about $401 billion, while China imported nearly $131 billion in goods from the United States.

Did Trump’s tariff threats make any difference?

It seems so, but not in the way the United States might have wanted. As Trump’s inauguration approaches, and the threat of tariffs on Chinese imports increases, American companies have increased their purchases of Chinese goods to stock up before import costs rise.

In November 2024, Chinese exports to the United States reached $47.3 billion, up from $43.8 billion in November 2023, according to the Observatory of Economic Complexity (OEC). This means an increase of 8 percent.

Meanwhile, Chinese imports from the United States fell by 11.2% from $14 billion to $12.4 billion in November 2024 compared to November 2023. Simply put, amid Trump’s threats, the US trade deficit with China widened.

Although the US government data differs somewhat from the Organization for Economic Cooperation data, they point in the same direction. Between July and November 2024, US imports from China amounted to about $203 billion, an increase of 6.8% from $190 billion during the same five months of 2023.

China’s overall exports have also boomed. Last month, China’s total exports hit record levels, increasing 10.7 percent in December compared to the previous year, exceeding analysts’ estimates. Total exports for 2024 reached $3.58 trillion, an increase of 5.9 percent over 2023.

China’s trade surplus rose to a record $992 billion in 2024, representing a 21 percent increase from the previous year, customs reported Monday.

There could be more bad news for the United States.

“While this flow has temporarily fueled China’s trade surplus, the broader trade relationship has been undermined by US policies,” Carlos Lopez, Chatham House fellow for the Africa programme, told Al Jazeera.

“Escalating tariffs and continued unilateral actions could further erode confidence in the global trading system, prompting China to diversify its partners and reduce dependence on the US market,” said Lopez, whose areas of expertise include international trade and China. He said.

“The current boom may provide short-term gains for both economies, but it highlights the fragility of a system increasingly dominated by trade wars and unpredictability.”

What is Trump’s tariff war?

Trump has announced plans to impose tariffs on China, Canada and Mexico since taking office, but many other countries around the world are also preparing to take similar measures.

He initially launched a tariff war on China during his first term, and by 2018, the United States and China were imposing tariffs on each other.

While a truce in the tariff war between the US and China was declared in January 2020, Joe Biden ultimately continued Trump’s policies after winning the presidential election in 2020 – despite this. criticism them during his election campaign.

In May 2024, I checked with the Biden administration Section 301 of the Trade Code imposed higher tariff rates ranging from 25 to 100 percent on some Chinese imports. Electric cars and solar cells were among the affected products.

“The tariffs imposed by the Biden administration have imposed restrictions on trade and technology with China, which will be difficult for Trump to reverse,” said Manoj Kewalramani, head of the Indo-Pacific Research Program and a fellow for China studies at the Takshashila Institute’s India Public Policy Center. , to Al Jazeera.

China lost its position as the United States’ largest trading partner to Mexico in 2019, three years after Trump was elected president in 2016. As of November 2024, Mexico was the United States’ largest trading partner, with a total value of $69.1 billion. Trade in that month; Canada, with total trade of $61.8 billion; and China, with a total trade of $50.5 billion.

“Trump sees tariffs as important, not only from an economic standpoint, but also from a negotiating standpoint,” Kewalramani said, adding that there could be tariff negotiations similar to those that took place around January 2020. But it may not happen immediately. He said.

“The timing of tariffs is often subject to political maneuvering and administrative processes, and the lack of transparency in these decisions undermines the predictability of the trading system,” Lopez said.

“Unilateral US actions, without consultation with trading partners or adherence to multilateral norms, create uncertainty for businesses and investors. This unpredictability not only disrupts supply chains, but also erodes confidence in the existing global trading system.” On the rules, which is already under pressure.

The tariffs are intended to help the United States get out of its $1.9 trillion deficit. However, Lopez said, “Getting out of the deficit requires more than just tariffs or protectionist measures; It requires strategic investments in technology, infrastructure and workforce development.

What will US-China relations look like during a second Trump era?

The United States and China are the two largest economies in the world. The US GDP as of 2023 was $27.36 trillion, according to World Bank data, compared to $17.79 trillion for China.

What will happen regarding tariffs during Trump 2.0 is unpredictable. “We have to wait and see if anything close to 60 percent is achieved,” Kewalramani said.

Out of 26 Executive orders On the day of his inauguration, Trump signed an order delaying the implementation of the ban on the popular short-video app TikTok, owned by Chinese company ByteDance, by 75 days. However, he has threatened to impose tariffs on China if it does not agree to a potential US deal with TikTok, according to Reuters news agency.

Trump invited Chinese President Xi Jinping to attend his inauguration, which was attended by his vice president, Han Zheng. Kewalramani assumed that Trump and Xi would continue to communicate, much like Biden and Xi, despite sweeping restrictions on China from the Biden administration.

“China has already shown flexibility by diversifying trade partnerships and doubling down on domestic innovation. It is likely to expand the Belt and Road Initiative [BRI] “And invest heavily in advanced sectors such as green energy and technology to maintain their export competitiveness,” Lopez said.

The Belt and Road Initiative is a network of highways, ports and railways that China is building. This global infrastructure is set to better connect Asia with Africa, Europe and Latin America.

“It is important that China capitalizes on the unilateral approach adopted by the United States, positioning itself as a defender of multilateralism, creating new opportunities to fill the void left by the United States in global trade leadership. Rather than isolating China, the United States’ actions risk pushing its further integration In alternative economic networks, weakening the influence that the United States seeks to maintain.

How will consumers be affected?

“I expect an increase in tariffs, but perhaps not up to 60 percent,” Kewalramani said, adding that higher tariffs would lead to “a significant cost explosion for American consumers.”

According to the Congressional Budget Office (CBO), a nonpartisan federal agency, Trump’s tariff policy would boost inflation and shrink the economy, but there are caveats.

A December report by the Congressional Budget Office on the effects of higher tariffs predicted inflation would rise by 1 percentage point by 2026, which could cost American households an average of $1,560 a year, according to an assessment by the Budget Lab, an independent policy research center. My party at Yale.