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8 Apr 2025

Trump's Tariff: Will a Trade War Break Out Between World's Largest Economies US and China? What will be its impact?


The possibility of a trade war between the world's two largest economies has increased significantly. China has strongly objected to U.S. President Donald Trump's threat of imposing an additional 50% tariff on Chinese goods.


China: We will not accept American blackmail


Trump said that if China does not withdraw its decision to impose a 34% import duty on American goods, he will proceed with the additional 50% tariff. In response, China's Commerce Ministry declared that it would not accept what it termed American "blackmail" and vowed to resist these measures until the end.


Analysts say that the recent developments have heightened the likelihood of a trade war. The China's Commerce Ministry reiterated its stance. It said that it would never accept America's demands and is prepared to counter American tariffs vigorously.


Newspaper questions effectiveness of Trump's trade policies


China's state media has also reacted strongly to Trump's remarks. The People's Daily, the official newspaper of the Communist Party of China, stressed that China's actions are "just and within the legal limits." It further questioned the effectiveness of Trump's trade policies. Newspaper said, "It has been one or two years since the U.S. started a unilateral trade war with China. But what has been its result?"


'Chinese economy continues to develop'


The newspaper claimed that despite the pressures from the U.S., China's trade has demonstrated resilience, with the Chinese economy continuing to develop. In contrast, it pointed out that the U.S. has failed to reduce its trade deficit.


China dismissed the notion that the tariffs are reciprocal, labeling it as baseless and indicative of a threatening attitude. By taking a firm stance against Trump, China is likely to garner support from the international community and may seek new trade partners to offset potential losses in the American market.


However, it is important to note that China's own economic situation is not without challenges. Domestic demand is declining, unemployment is rising, and the economy has been sluggish for several years.


Increasing bitterness


President Trump had previously imposed a 54% import duty on Chinese goods, and the prospect of an additional 50% tariff complicates the situation further. The escalating rhetoric between the two nations is becoming increasingly bitter.


Experts indicate that even if tariffs hinder China's exports, the country appears unwilling to back down. If China asserts that it will fight until the end, analysts believe it is a credible stance. Should the U.S. raise tariffs again, China is expected to respond in kind, even if it adversely affects its exports.


Prakash Jumar Pandey

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