China warns Trump: new tariffs could trigger destructive trade war

This comes as Trump, who will take office on January 20, has promised to add a 10% tariff on imports from China. His reason for this? He wants China to do more to stop the flow of fentanyl, a dangerous drug, into the United States.

During his election campaign, Trump said that if China did not act to stop the illegal trafficking of fentanyl, he would raise tariffs. He also threatened that these tariffs could go above 10%, possibly reaching as much as 60% on Chinese imports.

China's state-controlled newspapers, including China Daily and Global Times, have warned Trump that such a move would hurt both countries. They said a new tariff war would cause damage to the world’s two largest economies. These papers made it clear that China would not be a "scapegoat" for the US’s fentanyl problem.

China Daily called Trump’s threat “far-fetched,” saying there is no good outcome for either side in a tariff war. The editorial warned that using tariffs as a political tool could harm everyone involved. It also stated that if the US continues to politicize trade issues, no country would come out unscathed.

Economists are already lowering their growth predictions for China. They are worried that higher tariffs could slow down China’s economy, which is worth $19 trillion. Some experts are predicting China’s growth rate could fall to around 4% in 2025 and 3.8% in 2026.

Louis Kuijs, an economist at S&P Global Ratings, warned that the risks of such a tariff war are high. He explained that, based on current predictions, tariffs on Chinese goods could increase from 14% to 25%. This would raise prices for many products, and American consumers would feel the pinch in their daily lives.

Trump’s tariff threat is already shaking China’s industrial sector. China sells over $400 billion in goods to the US every year, along with even more parts that are used in products sold to other countries. A rise in tariffs would make these goods more expensive, hurting China’s economy.

China’s industrial leaders are preparing for a difficult few years. Gao Lingyun, an analyst in Beijing, said using the fentanyl issue as an excuse to increase tariffs is “untenable.” He explained that it is not a convincing reason to make China bear the burden of the US’s drug problems.

Trump’s pick of Jamieson Greer as the new US trade representative signals that the US is ready for another tough round of trade talks with China. Greer was a key player in Trump’s first-term trade war against China and worked to renegotiate deals like the North American Free Trade Agreement (NAFTA). With Greer in charge, trade talks between the US and China could become even more challenging.

Trump’s goal is clear: he wants to reduce the trade deficit with China and boost American manufacturing. 

However, how far he will go with tariffs remains uncertain. While he has suggested a dramatic increase, experts are unsure whether it will reach the 60% level he previously mentioned.

The future of US-China trade relations is full of uncertainty. Many questions remain about what Trump will do once he enters office. If he moves forward with his tariff plan, it could lead to a renewed trade war between the two superpowers.

Both countries are now in a waiting game, with China hoping to avoid a full-blown tariff war, while the US prepares for what may come. One thing is clear: if Trump follows through with his tariff plans, the global economy may feel the effects, and it could take years for things to return to normal.