David Edwards
With the imposition of more tariffs, export limitations, and World Trade Organization (WTO) legal action, China has intensified its trade war with the United States. Washington’s recent 10% tariff increase on all Chinese imports under the Trump administration prompted the action.
The retaliatory actions were announced by Beijing’s Ministry of Commerce on Tuesday, indicating a growing economic impasse between the two biggest economies in the world.
China Places Extensive Tariffs on American Farm Products
15% tariffs on important US agricultural exports, such as cotton, wheat, corn, and chicken, have been issued by China’s Ministry of Finance. Furthermore, American sorghum, soybeans, hog, beef, fish, fruits, vegetables, and dairy goods would now be subject to a 10% levy. Due to their heavy reliance on Chinese demand, US farmers are at serious risk from these penalties, which are scheduled to go into force on March 10.
By adding 15 American companies to an export control list, Beijing is strengthening its hold on trade restrictions in addition to tariffs. Chinese dual-use materials—essential parts with both military and commercial uses—will not be allowed to reach these businesses.
Ten US companies have also been added to China’s list of “unreliable entities,” which prevents them from doing business there. Illumina, a significant biotech company that specializes in gene sequencing, is one of the companies on the blacklist. Illumina will be unable to export sequencing equipment to China as a result of the limitations, which are a direct reaction to Trump’s earlier tariffs.
There is pressure on technology companies as well. Access to Chinese dual-use materials is now prohibited for US drone manufacturer Skydio and AI startup Shield AI, which is supported by venture capital firm Andreessen Horowitz. For some businesses, the restrictions can cause serious supply chain interruptions.
China Files a WTO Case Against the US Over Tariffs
China has formally complained to the World Trade Organization (WTO) about the United States’ alleged violations of international trade laws as part of its counteroffensive.
Chinese officials contend that Washington’s unilateral tariff increases are against WTO regulations and jeopardize the stability of international commerce. Beijing has previously used the WTO dispute settlement procedure, most notably in February when it launched an antitrust investigation into Google and imposed export limits on minerals in retaliation for a previous round of US tariffs.
China’s Leaders Meet for a Crucial Economic Strategy Conference
China’s senior political leadership has gathered for the Two Sessions, the nation’s most important yearly political assembly, amidst growing economic instability. To determine the country’s economic strategy, thousands of delegates—including legislators, corporate leaders, and legal specialists—have gathered in Beijing.
The main topic of conversation is Premier Li Qiang’s government work report, which is anticipated to set China’s annual economic growth goal of about 5%. Beijing is also planning to increase its fiscal deficit from 3% of GDP in 2024 to 4% in order to protect the economy from rising trade disputes.
At the end of the week-long Two Sessions event on March 10, Foreign Minister Wang Yi is anticipated to provide an explanation of China’s foreign policy stance, including its attitude to the ongoing tensions between the United States and China.
China plans to lower its consumer price inflation target to about 2%, the lowest level in more than 20 years. With trade disputes and inflation straining its economy, Beijing’s future moves might further influence the direction of world markets.
