U.S. Initiates Discussion on Imposing Tariffs with China, Reports State Media
** San Francisco, April 18: A person strolls beneath a canopy of glowing lanterns gracing Grant Avenue in Chinatown.** [AP/YONHAP]
Shedding Light on Trade Relations
Incentives for foreign tourists to boost inbound spending
China's selective tariff exemptions on American goods
The ongoing trade saga between the U.S. and China
Background insight:
Recent years have seen a marked change in U.S.-China trade relations, characterized by tariffs and countermeasures causing ripples across the global economy:
Reciprocal Tariff Tussles
- The U.S. strikes back: On April 2, 2025, a 54% tariff was imposed on Chinese imports, consisting of a 20% existing duty along with a fresh 34% surcharge. The automobile, steel, and aluminum sectors faced sector-specific tariffs of 25%. [2]
- China responds: In retaliation, China raised its tariffs on U.S. goods to 125% and refused to engage in further tariff negotiations. [2]
- Widespread tariffs: A 10% baseline tariff on all imports took effect April 5, with additional tariffs for selected countries implemented by April 9. [2]
Economic and Sectoral Consequences
- Heightened consumer and business costs: The tariff increase will likely push up prices for American consumers, disrupting not only major franchises like Shein, Temu, and Amazon but also smaller U.S. businesses relying on Chinese imports. [2]
- Multilateral disengagement: Tensions grew between the two nations as China filed a WTO complaint in February 2025 over U.S. regulatory practices, signaling a decline in multilateral engagement. [3]
- Investment limitations: U.S. restrictions on Chinese investments in February 2025 added more strain to the economic partnership. [2]
Wider Policy Perspective
- CHIPS Act quandary: Uncertainty continues to cloud funding for the CHIPS Act, even as Taiwan Semiconductor Manufacturing Company (TSMC) anticipates continued U.S. support. Taiwanese semiconductors remain tariff-exempt. [3]
- TikTok's temporary reprieve: The U.S. extended the divestment deadline for TikTok by 75 days, forestalling a potential nationwide ban. [3]
Persisting along the path of protectionism under the Trump administration, these actions reflect the growing adversarial trade stances of both nations. Experts caution of sustained supply chain disturbances, inflationary pressure, and a worrisome erosion of multilateral trade principles. [2][3]
- The contentious trade standoff between the U.S. and China, highlighted by tariffs and countermeasures, has significantly influenced global economy dynamics.
- Following the U.S.'s imposition of a 54% tariff on Chinese imports in April 2025, China retaliated by raising tariffs on U.S. goods to 125%.
- The tariff skirmish between the two nations has led to a widespread 10% baseline tariff on all imports, implementing additional tariffs for selected countries by April 9.
- The escalating tariff increases may lead to increased costs for American consumers, affecting major franchises like Shein, Temu, and Amazon, as well as smaller U.S. businesses reliant on Chinese imports.
- Amidst this growing tension, China filed a complaint against U.S. regulatory practices with the WTO, signaling a decline in multilateral engagement.
- Furthermore, U.S. restrictions on Chinese investments placed additional strain on the economic partnership.
- The future of the CHIPS Act and TikTok's fate remain uncertain, with potential implications for broader trade relations and the global technology industry.
