Donald Trump’s tariff hike on $200 Billion worth of Chinese starts May 10. It’s the latest development in what China calls “the largest trade war in economic history.” CGTN’s Gerald Tan has this overview of what’s at stake.
The United States and China are each other’s largest trading partners. But China exports a lot more to the U.S. than the other way around.
Last year, the United States exported goods worth $120.3 Billion to China.
But it imported $539.5 billion of Chinese merchandise. China’s Ministry of Commerce said conflicting accounting methods distort the deficit. It said U.S. calculations inflate it by around 20 percent every year.
For the U.S., that translates into a $419.1 Billion trade deficit in goods. And that’s a problem for Donald Trump. While campaigning in 2016, he quipped: “It’s amazing that for years we’ve had massive deficits, and going up, going up fast. Unless I become president. You will see a drop like you’ve never seen before.”
So despite Trump’s campaign pledge, he’s now presiding over the widest U.S. trade deficit on record. To make the price of domestic goods more competitive, Trump slapped tariffs on Chinese merchandise worth $253 Billion. Beijing retaliated, imposing tariffs on U.S. imports amounting to $110 Billion.
Then this week, Trump said he would hike tariffs from 10-percent to 25-percent on $200 billion worth of Chinese goods starting Friday.
He is also threatening new tariffs on additional Chinese imports worth $325 Billion. Essentially, this would cover everything shipped in from China.
Trump says he’s taking action because of a lack of progress in the trade negotiations.
China’s Ministry of Commerce said any “escalation in trade friction” is not in anyone’s interests, and warns China will take “necessary countermeasures.”