* It’s early days, but the warning signs are flashing red for the US.
* It's still early, but the alarm bells are ringing loudly for the US.
United States President Donald Trump suspended his “reciprocal tariffs” on major US trading partners on April 9, he ramped them up on China’s goods. US trade levies on most imports from China have climbed to 145 percent. Beijing retaliated with duties of its own, at 125 percent on US goods.
Trump has long accused China of exploiting the US on trade, casting his tariffs as necessary to revive domestic manufacturing and reshore jobs back to the US. He also wants to use tariffs to finance tax cuts. Most economists remain sceptical Trump will achieve his aims.
For now, the US and China are locked in a high-stakes game of chicken. The world is waiting to see which country will yield and which will stay the course. As Trump nears his first 100 days in office for the second time, here’s where the tariff war with China stands.
What’s happening with negotiations?
Trump has recently emphasized the potential for reaching a trade agreement with China. Just last week, the US president indicated that his tariffs on China are expected to be significantly reduced soon.
"We are on track to achieve a fair deal with China," Trump stated to reporters on April 23, raising expectations for a reduction in tensions. He also mentioned that his administration is currently engaged in negotiations with the Chinese, though he did not provide further details.
On April 24, however, China’s Ministry of Commerce rebuffed president Trump’s remarks, saying there were no talks taking place between the two countries.
"Any claims about the progress of China-US economic and trade negotiations are groundless and have no factual basis,” ministry spokesman said.
While he insisted that Beijing won’t duck any economic blows from Washington, he also said the door was “wide open” for talks.
Last week, the Reuters news agency reported that China was evaluating exemptions for select US imports – a list of up to 131 products.
Beijing has not made any public statement on this issue.
Has the tariff war impacted US exports?
Trump introduced his sweeping tariffs on China less than three weeks ago. The fallout for US businesses won’t be fully felt until later this year. Still, the warning signals are already flashing red.
Data from the US Department of Agriculture shows that exports of soya beans – the biggest US farm export – fell dramatically for the period April 11-17, the first full week of reporting since Trump’s China tariff announcement.
By April 17, net sales of US soya beans dropped by 50 percent compared with the previous week. That was driven by a 67 percent fall in weekly soya bean exports to China, which, until recently, was America’s biggest export destination for the legume.
Trump-China tariff war: Who’s winning so far?
After United States President Donald Trump suspended his “reciprocal tariffs” on major US trading partners on April 9, he ramped them up on China’s goods. US trade levies on most imports from China have climbed to 145 percent. Beijing retaliated with duties of its own, at 125 percent on US goods.
Trump has long accused China of exploiting the US on trade, casting his tariffs as necessary to revive domestic manufacturing and reshore jobs back to the US. He also wants to use tariffs to finance tax cuts. Most economists remain sceptical Trump will achieve his aims.
For now, the US and China are locked in a high-stakes game of chicken. The world is waiting to see which country will yield and which will stay the course. As Trump nears his first 100 days in office for the second time, here’s where the tariff war with China stands:
list of 4 items
list 1 of 4
China pledges support for economy, dismisses US claims on tariff talks
list 2 of 4
Trump says petrol and grocery prices are down. Facts say otherwise
list 3 of 4
Trump trade war drives uncertainty across several industries
Has the tariff war impacted US exports?
Trump introduced his sweeping tariffs on China less than three weeks ago. The fallout for US businesses won’t be fully felt until later this year. Still, the warning signals are already flashing red.
Data from the US Department of Agriculture shows that exports of soya beans – the biggest US farm export – fell dramatically for the period April 11-17, the first full week of reporting since Trump’s China tariff announcement.
By April 17, net sales of US soya beans dropped by 50 percent compared with the previous week. That was driven by a 67 percent fall in weekly soya bean exports to China, which, until recently, was America’s biggest export destination for the legume.
According to Piergiuseppe Fortunato, an adjunct professor of economics at the University of Neuchatel in Switzerland, “China’s retaliatory tariffs will hit US farmers hard. Some may go out of business.” He added that all sectors with exposure to China would come under strain.
In 2023, the US exported roughly $15bn of oil, gas and coal to China. Losing that market would hit US energy firms.
How will China’s economy be affected?
According to the Office of the US Trade Representative, the US imported $438.9bn in Chinese goods last year.
That amounts to roughly 3 percent of China’s total economic output, which remains heavily reliant on exports.
In a report shared with its clients this month, Goldman Sachs said it expects Trump’s tariffs to drag down China’s gross domestic product (GDP) by as much as 2.4 percentage points.
Fortunato told Al Jazeera: “The US is one of China’s biggest export markets, so tariffs will slow GDP growth. But Beijing has played this smartly as it began diversifying its imports away from the US during the first Trump trade war” in 2018.
Could the US lose its geopolitical standing?
More generally, reports suggest that Washington is asking trade partners to loosen their economic ties with China as a pre-condition for securing relief from Trump’s “reciprocal” tariffs.
Nevertheless, US allies seem largely opposed to any economic showdown with China. Last week, the European Commission said it has no intention of “decoupling” from China.
“It’s hard to see why countries would want to undermine their own business interests to try and reduce America’s trade deficit with China,” Fortunato said. “On this point, I think Trump has been short-sighted and may be forced to blink first on lowering tariffs with China.”
Is Trump losing his grip on Republican voters?
For Trump's party, his aggressive posturing appears to be taking a toll politically. A recent Economist-YouGov survey reveals that Americans feel Trump's economic policies have negatively impacted them more than positively, with a significant 30-point difference.
And public approval of the president’s economic management has been low for a while: It had fallen to 37 percent in a Reuters-Ipsos poll published on March 31, his lowest score ever in that survey.
Should Trump maintain his current path, experts suggest that his approval ratings could decline further, putting the Republican Party's tenuous hold on the US House of Representatives – and potentially the Senate – at risk.
For these reasons”, Fortunato said, “China does not feel compelled to rush to the negotiating table to secure a trade deal. That will probably fall to Trump.”
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