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United States President Donald Trump said on Tuesday he was considering imposing a 10 percent tariff on imports from China, which could come into force as soon as February 1.<\/p>\n
It was Trump\u2019s latest trade threat against China, the world\u2019s second-largest economy after the US, and Washington\u2019s biggest geopolitical rival. During the campaign that ultimately led to his re-election, Trump threatened to impose up to 60 percent tariffs on Chinese goods, intensifying an ongoing trade war.<\/p>\n
Yet, if the intent of the proposed tariffs was to hurt Chinese exports, in a bid to push for US interests in their trade relationship, Trump\u2019s threats \u2014 so far at least \u2014 appear to have had the opposite effect.<\/p>\n
China\u2019s overall exports, including to the US, have grown in recent months.<\/p>\n
So why is Trump threatening China with tariffs, how are Chinese exports still increasing, and what is next in their trade tussle?<\/p>\n
On Tuesday, Trump argued that China was behind the supply of fentanyl to US neighbours, which he said was in turn responsible for a deadly addiction crisis in the country.<\/p>\n
A day earlier, he said he was considering imposing 25 percent tariffs on Mexico and Canada, alleging the countries were allowing \u201cvast numbers of people\u201d and fentanyl into the US. He also announced the creation of an \u201cexternal revenue service\u201d that would \u201ccollect our tariffs, duties, and all revenue that come from foreign sources\u201d.<\/p>\n
As 2024 came to a close, Chinese exports<\/a> to US companies rose, growing by 4 percent between November 2023 and November 2024.<\/p>\n But more broadly, Trump has also accused China of unfair trade practices. China, the world\u2019s largest exporter, has a massive balance of trade advantage with the US. In the first 11 months of 2024, Chinese exports to the US totalled about $401bn, while China imported approximately $131bn in goods from the US.<\/p>\n It appears so \u2014 just not the way the US might have wanted. As Trump\u2019s inauguration approached, and the threat of tariffs on Chinese imports grew, US companies ramped up their purchase of Chinese goods to stock up before the import costs shot up.<\/p>\n In November 2024, Chinese exports to the US stood at $47.3bn, up from $43.8bn in November 2023, according to the Observatory of Economic Complexity (OEC). That is an 8 percent increase.<\/p>\n Meanwhile, Chinese imports from the US dropped by 11.2 percent from $14bn to $12.4bn in November 2024 compared with November 2023. Simply put, amid Trump\u2019s threats, the US trade deficit with China widened.<\/p>\n While US government data differs somewhat from OEC data, it points to the same trend. Between July and November 2024, US imports from China reached about $203bn, up 6.8 percent from $190bn over the same five months in 2023.<\/p>\n China\u2019s overall exports have boomed too. Last month, Chinese total exports hit record highs, up 10.7 percent in December compared with a year earlier, beating analyst estimates. Total exports for 2024 reached $3.58 trillion, a 5.9 percent increase from 2023.<\/p>\n China\u2019s trade surplus soared to a record-breaking $992bn in 2024, representing a 21 percent increase from the previous year, as reported by the customs on Monday.<\/p>\n And there could be more bad news for the US.<\/p>\n \u201cWhile this influx temporarily fuelled China\u2019s trade surplus, the broader trade relationship has been undermined by US policies,\u201d Carlos Lopes, a Chatham House associate fellow for the Africa Programme, told Al Jazeera.<\/p>\n \u201cEscalation of tariffs and a continuation of unilateral measures could deepen the erosion of trust in the global trade system, further pushing China to diversify its partners and reduce reliance on the US market,\u201d Lopes, whose areas of expertise include international trade and China, said.<\/p>\n \u201cThe current surge may offer short-term gains for both economies, but it highlights the fragility of a system increasingly dominated by trade wars and unpredictability.\u201d<\/p>\n Trump has announced plans for tariffs on China, Canada and Mexico since taking office, but many other countries worldwide are also bracing for similar measures.<\/p>\n He had initially launched a tariff war on China during his first term and by 2018, the US and China were imposing tariffs on one another.<\/p>\n While a truce to the tariff war between the US and China\u00a0was announced in January 2020, Joe Biden eventually continued with Trump\u2019s policies after he won the presidential election in 2020 \u2014 despite criticising<\/a> them during his electoral campaign.<\/p>\n In May 2024, the Biden administration reviewed<\/a> Section 301 of the Trade Act and imposed higher tariff rates of 25 to 100 percent on some Chinese imports. Electric vehicles and solar cells were among the affected products.<\/p>\n \u201cThe Biden administration levy has tabled restrictions on trade and tech with China, which will be difficult for Trump to walk back on,\u201d Manoj Kewalramani, chairperson of the Indo-Pacific Research Programme and a China studies fellow at Indian public policy centre Takshashila Institution, told Al Jazeera.<\/p>\n China lost its position as the top trade partner of the US to Mexico in 2019, three years after Trump was voted in as president in 2016. As of November 2024, the top trading partners of the US were Mexico, with $69.1bn worth of total trade that month; Canada, with $61.8bn worth of total trade; and China, with $50.5bn worth of total trade.<\/p>\n \u201cTrump sees tariffs as important, not just from an economic point of view, but also from a negotiating point of view,\u201d Kewalramani said, adding, there might be tariff negotiations akin to those around January 2020. But they may not take place immediately, he said.<\/p>\n \u201cThe timing of tariffs is often subject to political manoeuvres and administrative processes, and the lack of transparency in these decisions undermines the predictability of the trade system,\u201d said Lopes.<\/p>\n \u201cUnilateral US actions, without consultation with trading partners or adherence to multilateral norms, create uncertainty for businesses and investors. This unpredictability not only disrupts supply chains but also weakens confidence in the rules-based global trading order, which is already under strain.\u201d<\/p>\n The tariffs aim to help the US climb out of its $1.9 trillion deficit. However, Lopes said, \u201cClimbing out of the deficit requires more than tariffs or protectionist measures; it demands strategic investments in technology, infrastructure, and workforce development.\u201d<\/p>\n The US and China are the largest economies in the world. The US gross domestic product (GDP) as of 2023 was $27.36 trillion, according to World Bank data, against China\u2019s $17.79 trillion.<\/p>\n What will happen in terms of tariffs during Trump 2.0 is unpredictable. \u201cWe\u2019ll have to wait and see whether anything close to the 60 percent number is reached,\u201d Kewalramani said.<\/p>\nHave Trump\u2019s tariff threats made a difference?<\/h2>\n
What is Trump\u2019s tariff war?<\/h2>\n
What will US-China relations look like during Trump 2.0?<\/h2>\n