On Tuesday, April 8, China made a statement about a possible increase in duties by the United States. The Ministry of Commerce of the PRC has expressed a decisive denial of the intentions of Donald Trump's administration to raise duties on Chinese goods by another 50%. Beijing noted that the threat of raising duties is a "mistake" and only confirms the "blackmail nature" of US policy. The China's authorities warned that if the US would insist on their own, China will "fight to the end."
In the case of such measures, according to experts, the total amount of duties can increase to 104%, which will significantly affect the bilateral trade between the two largest economies in the world. Some analysts believe that trade wars can develop from economic into purely political conflicts, where competitions are reduced to principles and will, not to economic benefits.
The Tianchin, Senior Economist in Economist Intelligence Unit, believes that China does not matter whether duties will increase by 50%or 500%, as China is already faced with tariffs exceeding 60%, so raising the rates will only lead to further stress.
In addition, Beijing reinforced his statement in the form of devaluation of the national currency. According to Financial Times, China has recorded the exchange rate of its currency at 7.20 yuan per dollar - the lowest since September 2023. This can be a signal that China is ready to use devaluation as a means of compensation to neutralize the negative effect of US tariffs.
The Trade War between China and the United States has been going on for several years, and it seems that its development will be determined not only by economic but also by political factors. Increasing duties, in the case of their introduction, will create new barriers to trade, which can further exacerbate global economic problems.
Now it all depends on whether the United States is ready to take such radical steps and whether China can maintain economic stability in such conditions. At the same time, the growth of tariffs only deepens global economic contradictions, putting countries before choosing between economic interests and political principles.
