Trade between the largest economists in the world – a specific link Global economy For two decades – it is To support life. American definitions on China Stand now by 145 %; China’s tariff for the United States now Stand by 125 %. This is just a basic line, which does not include additional definitions on Specific goods such as steel (In the case of the United States) or Agricultural products (In the case of China).

“The tariff rates are now very high to be exorbitant for most direct bilateral trade,” says Yeling Tan, Professor of General Policy at Oxford University.

Even Beijing realizes that, with these definitions, American goods do not have an opportunity. “Given that American goods are no longer marketable in China under current tariff rates, if the United States raises more customs tariffs on Chinese exports, China will ignore such measures.” statement Declaration of new definitions by 125 %.

The customs duties quickly identify a close economic relationship: Chinese manufacturers that were built products, from garden chairs and Christmas jewelry along the way to the way to Smartphones and SemiconductorAnd bought American consumers and companies.

Washington and Beijing have indicated that they are open to negotiations, even if there are no general signs that they are talking. Each one believes that the other need to move first; Friday morning, CNN I mentioned The United States, instead of requesting a phone call to XI, has instead called on a phone call with Trump.

The United States may have realized that its sharp tariff in China is not sustainable. Late Friday, the White House Exempt Electronic goods such as smartphones, laptops and computer processors from American definitions, including some supposed to China.

Definitions and trade

The United States imported $ 438 billion from China in 2024, compared to exports of $ 143.5 billion. Data from the American Statistics Office.

Trump’s tariff of 145 % on Chinese imports is just the foundation line. There too 25 % tariff On imports of steel and aluminum, and A threat waving on the horizon Through a 25 % tariff on any country that uses Venezuelan oil, a group that includes China. Then there is all Previous definitions Smell by previous administrations: on Chinese home appliances, solar panels, and EVS.

Beijing and slapping An additional tariff On American goods, such as heavy machines, oil, gas and agricultural products. A group of barriers other than fire also imposed. For example, on Friday, Chinese officials said they would do Reducing the number of American films He agreed to the examination in China.

If the current situation – 145 % of the customs tariffs on China, and 10 % on everyone – it is likely that Western and Chinese companies may accelerate their engine to create manufacturing centers outside China in countries such as Vietnam, India and Mexico.

The problem is that Trump’s commercial falcons want to relax “China is one plus“Trump’s tariff” Trump’s “Tahrir Day” carried out by Trump The high definitions of definitions In countries like Vietnam and Cambodia that attracted Chinese investment. Officials like Trade Adviser Trump Peter Navarro We want governments To target Chinese trade as a condition to reduce the definitions.

Vietnam has been subjected to cutting Chinese goods traveling through its territory as part of the tariff negotiations with the United States, Reuters Reports Quoting a governmental document and an unveiled source.

Then there is a risk that Trump cannot reach a deal with commercial partners, and the return of “liberation day” definitions. “The factories that have already turned into conductors are likely to increase production to benefit from stopping, but there may be a new investment less fear of definitions in” one plus “countries, suggested Tan.

The acute tariff in China also encourages American companies that come to the second largest economy in the world to consider diversifying their supply chain. On Friday, the Chinese semiconductor industry association Assure Companies did not need to pay a tariff on US chips and chip making equipment as long as they were made in a third location.

China stands out

Trump officials argue that China is more vulnerable to the trade war than the United States, on the pretext that the Chinese economy depends on the American consumer. If the United States closes its doors, China will not have anyone selling it, and the economy will collapse.

The White House also insists on stopping the Trump tariff Intentional strategy To isolate China while opening negotiations for the rest of the world. “It may say that he has entered China in a bad situation,” Treasury Secretary Scott Bessens said on Wednesday. The United States and its allies also suggested You can work together To pressure China on trade.

In fact, China depends on the United States now from what it was during the first Trump administration. Less than 15 % of China’s exports go directly to the United States, a decrease from about 19 % in 2018. Beijing has planted alternative sources for the United States, such as Brazil and Australia for agricultural products. Cow meat exports in Australia to China in the past two months It has already increased 40 % On an annual basis.

“China has options,” says Brown, referring to the largest commercial partner in China is now in Southeast Asia. “It is not a debtor to the United States in ways that were one day.”

To be clear, economists expect that China will achieve economic success from Trump’s tariff, with banks like City and Goldman Sachs Cut the 2025 GDP for the second largest economy in the world.

However, Beijing takes a bold position in its battle with the United States, where official speakers say China says.Fighting to the end“If the United States continues in a commercial war.

If we set aside, Beijing can be in a safer position than Trump’s American trade war Stock marketsand Long -distance bond returnsAnd The US dollar drowned– This is before Inflationary effects From the customs tariff has hit seriously.

“People in China really feel that they can” eat bitterness “, referring to a Chinese phrase that means perseverance through difficulties. This plays in their harsh position. I think they think that, in the end, if anyone will be treated, the United States will be.

Roberts, at least from Beijing’s perspective, adds the first trade war at never ended. The Biden Administration has kept the previous definitions of Trump on the applicable Chinese goods. Biden also imposed his definitions, such as a 100 % tariff on Chinese EVS, and perhaps more disturbing to Bickge – the technology sector in China was targeted with measures such as Prohibition of exports from the United States chip.

This means that Beijing has been on a “commercial war” since 2016. China has built commercial relations with other markets, and found new sources to replace American goods, and invested in its technology companies. “China is preparing for a world with access to the US market for several years so far,” says Tan.

And a commercial war, although it is painful, may accelerate some of the other Beijing’s priorities. “In a strange way, it fits Beijing’s goals in the long term of transferring their economy away from its dependence on the West and exports,” says Roberts.

However, China cannot easily convert export markets to other regions such as Europe, the Middle East or Southeast Asia. On the one hand, these areas – even developed markets like Europe – do not really have the same as consumption capabilities as Americans. Then there The risk of reaction. “These countries are cautious against facing the increase in Chinese imports from the American market,” Tan warns.

A deal or not a deal?

Economists are largely agreed on a full chapter between the United States and China will be very painful for both countries. Ian Osjoud, a professor of international relations at the University of Michigan, says the definitions of more than 100 % are “very punitive”. “There are a lot of companies in the United States that may not be able to stay at all. Even adult retailers will struggle.”

This may mean that in the end, the two sides will try to find a way to expand the scope of things – or the United States may decline from one side from some customs tariffs with the start of pain. However, the definitions are likely to be withdrawn to the pre -2024 level, not to mention the pre -2018 level. Osgood believes that the customs tariff can be returned to a relatively more “rational” level, and perhaps between 15 % and 30 %.

However, the rapid escalation of the trade war between the United States of China raises an uncomfortable question: What does the world look when its biggest economies refuse to deal with each other?

The world where Beijing and Washington cannot be dangerous to cancel manufacturing. Roberts says commercial relations due to the presence of foreign companies and citizens to it “a supernatural effect”, even if the idea is sometimes exaggerated. “If you are increasingly isolated, you do not have commercial relationships … the possibility of conflict is definitely rises.”

“At the end of the day, the fate of the giant economy will remain intertwined. The collapse of direct bilateral trade will harm companies and consumers in both countries,” says Tan.

“It will be a more volatile world.”

This story was originally shown on Fortune.com

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2025-04-12 23:07:00