After the increased tariffs on US products to 84% came into effect in China yesterday, the escalation of the trade war between Washington and Beijing is one of the leading topics in the American press today, BTA writes.
"The gloves have been taken off and the next chapter of the US-China separation has begun. The pain will be felt everywhere," writes the "Wall Street Journal". By raising tariffs on China and temporarily lifting high tariffs on dozens of other countries, US President Donald Trump has drawn the two largest economic powers into a battle that will leave neither of them unscathed and also risks triggering a collapse of the global economy, the publication notes.
The White House announced yesterday that the total amount of tariffs imposed on China since the beginning of Trump's second term already amounts to 145%. The tariffs may eventually be lifted, but there are already signs that some of the bilateral trade in goods worth $ 582 billion is stopping. American factories are canceling orders, and some Chinese manufacturers are putting their workers on temporary leave, the "Wall Street Journal" also writes. Since the latest sharp increase in tariffs, there has been a significant decrease in orders for cargo ships operating trans-Pacific routes, and US stocks fell sharply yesterday.
Trump says that any pain from US tariffs in the long term will be offset by the creation of new jobs and investment. But in the short term, things are different. Investment bank "J.P. Morgan" However, said that the US economy is more likely to contract later this year, notes "The Wall Street Journal".
Beijing joined the World Trade Organization (WTO) 23 years ago, and since then access to cheap Chinese goods has become part of the consumer-oriented US economy. By 2024, China accounts for about 13% of all US goods imports. The country offers a wide variety of goods, including smartphones, toys and industrial parts. Many American businesses depend on these imports, recalls "The Wall Street Journal".
A number of US companies began to adjust to the reality of increasing tariffs during Trump's first term. But if the new tariffs are maintained, these companies will face the prospect of losing all access to Chinese production, and this will cause significant changes for American consumers, the publication warns. Americans, who have already suffered stress from a 24 percent price increase over the past five years, may ultimately be forced to pay even higher prices for a smaller range of household goods, the publication predicts.
V. "The New York Times" focuses in more detail on the stakes for the American economy in the new trade war with China. After China imposed retaliatory tariffs on American exports, US Treasury Secretary Scott Besant asked a pointed and somewhat surprising question: "so what", the publication writes. The question underscores the Trump administration's argument that America is in a stronger position in the trade war with China given the extent to which the Chinese economy is dependent on exports to the United States, the "New York Times" commented.
According to the Office of the US Trade Representative, the United States exported $143.5 billion in goods to China last year. At the same time, the United States imported $438.9 billion in goods from China. The United States buys far more goods from China than China does from the United States, but Beijing's decision to retaliate against Trump's punitive tariffs by increasing levies on American imports to 84% may prove to be a more painful move than Besant allows, the newspaper points out. "New York Times".
The loss of China as an export market will deal a particularly hard economic blow to farmworkers and will affect many of the voters who helped Trump win the presidential election, the publication predicts. Retaliatory measures could force the Trump administration to resume aid for American farmers that was offered during his first term as president. US Secretary of Agriculture Brooke Rollins said on Wednesday that such an aid package is being considered, the "New York Times" notes.
The first trade war with China, which lasted from 2018 to 2019, resulted in billions of dollars in lost profits for American farmers. To compensate for the losses, Trump handed out $23 billion in subsidies from a fund to stabilize the agricultural sector. The fund benefited mostly large farms and farmers in the South, which fueled doubts about whether the funds were distributed fairly and left some farmers feeling cheated, the newspaper also wrote.
In general, American farmers oppose government aid, but Caleb Ragland, president of the American Soybean Association, said that federal aid may now be necessary, according to the "New York Times".
V. "Washington Post" focuses on the consequences for China of the new trade war.
China produces far more goods than Chinese households can buy. The rest of the goods are exported, and last year this led to a global trade surplus of 1 trillion dollars, the publication writes.
The imposition of new US tariffs calls into question China's ability to achieve this year's target for economic growth of about 5%, the newspaper commented. Investment bank "Goldman Sachs" yesterday lowered its forecast for Chinese GDP growth to 4%, but some analysts predict that the trade war could cut the growth rate in half, the "Washington Post" also writes.
Chinese officials like to point out that Beijing has had time to prepare for its second trade war with Trump. The United States currently accounts for about 15% of China's total exports. For comparison, in 2017 it amounted to almost 20%. In 2024, Chinese exports to the United States will amount to more than $ 400 billion, or about 3% of China's GDP, the Washington Post points out.
"Trade with the United States is now less important than it was in 2017, but this hits the Chinese economy at a very bad time," said Jörg Wuttke, former president of the European Union Chamber of Commerce in China, quoted by the Washington Post.
Another risk for China is that Trump's next target is likely to be backdoors to the American market, or more precisely, routing goods through third countries such as Vietnam or Mexico. This means that new markets will have to be found for the huge amount of Chinese goods, the American newspaper also writes. "They sell $500 billion worth of goods in the United States and they have to sell them somewhere else, in Europe or in the Global South. That would mean a tsunami of exports and they could start to face rising trade barriers in those other places," Wuttke said.
However, there are signs of optimism in China. "As long as the global economy is stable, Chinese companies can benefit from it," Guo Shan, an expert at China consultancy Hutong Research, told The Washington Post.
But Bert Hoffman, a former World Bank director for China, pointed to another risk facing the Chinese economy. "For China, it's not so much trade that's important, it's access to American technology," Hoffman said, quoted by The Washington Post. He predicted that "if restrictions on technology exports are further tightened, it will be more destructive to China's development in the short term".