Unlike Canada and Mexico, China is ready for a tit for tat over the new war of the tariffs, initiated by the President Donald Trump.
The Ministry of Commerce of China on Tuesday announced a 15 pc tariff on American coal and liquefied natural gas, as well as 10 pc on crude oil, farm equipment and some vehicles.
The new tariff structure will be implemented from Monday, February 10, 2025.
The move comes as the U.S. blanket levy of 10 percent on Chinese goods took effect. The vast majority of Chinese products reaching the US were small household items mostly sold by the online ecommerce platforms.
While the politicians will continue to boast their successes over their actions and reactions, and some key position holders mainly in the new US administration could be the beneficiaries of these actions.
But the real challenge is for the ‘American consumers’ are they going to pay higher prices for ultra-cheap daily used items coming from Chinese cottage and small industries.
Whereas on their part the entire business model of Chinese SME depends on how insanely cheap their products can be.
The other key imports from China to the US are both commercial and consumer electronics such as broadcasting equipment, computers and related machine parts including the photo copiers, heating – cooling systems.
The higher cost of rubber, iron &steel and other metal products can have its toll on the US industry too.
Besides, reduced import of energy raw material from the US, will pave way for other players including Iran and Russia to bridge the gap by increasing coal, natural gas and crude oil supplies to China.
Incidentally, the tariff war has been initiated by the new US President on the grounds that these countries and mainly Chinese were involved in supply of illegal chemical based drugs to America.
This accusation is totally new even for the Americans when it comes to Canada, and the profitability in drug business is so huge that the stamping 10 percent tariff on legal business of China will have negligible effect on the drug trade.
However, if the US administration was eyeing on some other concessions from China and Canada under the garb of tariff war, President Trump is likely to be successful as neither China, nor Canada or Mexico can bear a long term commercial conflict with the US.
