Wednesday
4th Dec 2024
Dhivehi Edition
President Xi and President-Elect Trum | Artwork: Mohamed Abaan, TMJ
China’s state media has issued a stark warning to US President-elect Donald Trump following his announcement of plans to impose a 10% tariff increase on Chinese goods until Beijing addresses alleged trafficking of fentanyl precursors. The proposed measure, according to Chinese editorials, risks plunging the two largest economies into a mutually damaging tariff war.
Trump, set to assume office on January 20, appears poised to revive hardline trade policies reminiscent of his first term, which disrupted global supply chains and drove up inflation. During his campaign, he pledged sweeping tariff hikes, some exceeding 60%, as part of efforts to reduce the US trade deficit and revive domestic manufacturing.
Chinese Communist Party publications China Daily and the Global Times criticized the justification for the proposed tariffs as “farfetched” and warned of severe economic consequences. “There are no winners in tariff wars,” China Daily emphasized, cautioning that politicizing trade issues could leave global markets reeling.
Economists have already adjusted growth forecasts for China’s $19 trillion economy, citing potential fallout from Trump’s policies. S&P Global Ratings recently lowered its growth estimates for China to 4.1% in 2025 and 3.8% in 2026, anticipating tariff increases from the current average of 14% to as high as 25%.
Gao Lingyun, an analyst with the Chinese Academy of Social Sciences, dismissed Trump’s strategy as “untenable,” while acknowledging the economic strain on China’s industrial sector, which exports over $400 billion in goods annually to the US.
In addition to targeting China, Trump has also threatened 25% tariffs on imports from Mexico and Canada, accusing the US' neighbors of failing to curb drug trafficking and illegal migration. This broader trade agenda, highlighted by the appointment of trade lawyer Jamieson Greer as US Trade Representative, signals a confrontational approach to global trade negotiations.
Trump’s renewed focus on tariffs aligns with his broader goal of delivering a "manufacturing renaissance" in the US, yet analysts remain wary. Louis Kuijs of S&P Global summed up the uncertainty: “There is still a large increase to go to get to 60%, and the risks in this area remain high.”
As China braces for potential economic shocks, Beijing’s response will be closely watched, with both nations facing heightened tensions that could ripple across global markets.