The White House said China is now facing up to a 245 percent tariff on imports to the U.S. “as a result of its retaliatory actions,” another escalation in a trade war between the world’s two largest economies.
The top potential tariff is higher than the previously stated 145 percent and was referenced in a fact sheet published by the White House late on Tuesday.
It accompanied an executive order signed by President Donald Trump that launched an investigation into the “national security risks posed by U.S. reliance on imported processed critical minerals and their derivative products.”
Chinese foreign ministry spokesperson Lin Jian was asked about the 245 percent rate at a press briefing on Wednesday. “You can ask the U.S. side for the specific tax rate figures,” Lin said, China News Network reported.
“This tariff war was initiated by the United States, and China’s necessary countermeasures are to safeguard its legitimate rights and interests and international fairness and justice, which are completely reasonable and lawful.”
Trump imposed a 10 percent tariff on imports from all countries. He has temporarily paused additional “reciprocal” rates set individually for each country depending on the trade barriers faced by the U.S. to allow time for negotiations on new deals.
The exception to that pause is China, which is facing increasingly higher tariffs from the U.S. and has responded in kind, among other countermeasures.
This week, China imposed more export controls on rare earths, which include materials used in high-tech products, aerospace manufacturing, and the defense sector.
Despite the eye-watering tariffs and tough rhetoric, both the U.S. and China have said they are open to talks on trade, though further tit-for-tat retaliation is likely in this conflict between two great powers.
Apparently exports to the US accounts for 2% of China’s GDP.
The real question is how much US GDP is relying on Chinese materials and products. I honestly have no idea, but I’m sure that it’s more than zero.
And any meaningful investment in to the US, unless you already have manufacturing there, doesn’t seem like a smart move. Tariffs (and policies in general) might change radically before the ink is dry on newspapers reporting latest changes.
It’s killing the board game industry right now.
Not to mention that building factories in the US will be quite expensive since a lot of those require machinery, building materials,… that also have to be imported. Even if you wanted to set up a whole domestic supply chain for those too you would need machines (and expertise) to make the first machines. Not to mention that it would take decades to setup all of that completely from scratch in the US and you would likely still have to import at least some raw resources.
Loads of rare earths are controlled by China (some estimates are 97% of all rare earth minerals), so yeah, I think they’re currently laughing their asses off at the US