New tariff increases from the United States on goods from several trading partners – including an additional 10 per cent on Chinese imports atop those previously imposed – could be the opening shots of one of the “most significant” trade wars in a century, analysts said.
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With these increases, they warned, Chinese exporters could be in for even deeper pain this year, especially if more hikes come in the absence of a bilateral trade deal.
US President Donald Trump said on Thursday that Washington would levy an additional 10 per cent in tariffs on all Chinese imports on Tuesday, effectively doubling the 10 per cent already implemented on February 4.
“Barring a last-minute reversal – always possible with Trump – the gloves are now off and the most significant global trade war in almost 100 years could be under way,” former US trade negotiator Stephen Olson said in an emailed commentary.
“The initial 10 per cent tariff on China was, for the most part, manageable. But the additional 10 per cent will be far more problematic.”
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Economists around Asia projected the combined tariff wave will shave 0.4-0.8 percentages points off China’s gross domestic product for 2025 while squeezing the profits of its exporters in the American market, as goods from other sources can be priced more competitively with lower tariff burdens.