Annabelle Liang
Journalist
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China said it would take “resolved countermeasures” in response to American prices
On Wednesday, American president Donald Trump presented prices on almost each of the American business partners, he had strong words for Beijing.
“I have a great respect for President XI (Jinping) of China, great respect for China, but they were enjoying a huge advantage of us,” said Trump at about an hour on Wednesday.
By holding a graph enumerating the countries and territories which, according to him, had set up obstacles to American products, Trump said: “If you look at this … China, first row, 67%. These are prices billed in the United States, including the manipulation of the currency and the commercial barriers.”
“We will invoice a reciprocal rate reduced by 34%,” he added. “In other words, they charge us, we invoice them, we load them less. So, how can someone be upset?”
But the Chinese Ministry of Commerce immediately called the decision “a typical act of unilateral intimidation” and has committed to taking “resolved countermeasures to protect its rights and interests”.
And the state agency, Xinhua, accused Trump of “transforming trade into a too simplistic tithe game”.
Experts think that Beijing has good reasons to be upset.
On the one hand, the last announcement is an addition to existing 20% prices on Chinese products.
Second, by imposing heavy prices on other countries in Southeast Asia, notably Cambodia, Vietnam and Laos, he slammed the door ” on the way China reprimanded its supply chains to bypass the prices imposed in Beijing during Trump’s first mandate.
There were five Asian nations in the 10 countries and the territories struck with the highest rates.
Taxes add up for China
Trump has imposed new prices for Chinese imports since his return to the White House in January, increasing the samples to 20%.
In less than a week, these prices will increase to 54%, apart from products such as cars, steel and aluminum, which will be subject to lower rates.
Beijing was also at the reception of other Salvos Trump Trade.
Earlier Wednesday, the president signed an executive decree to end a provision for low value parcels from China.
This had enabled Chinese electronic commerce giants like Shein and Temu to send packages with retail value of less than $ 800 (£ 617) in the United States, without taxes and inspections.
Nearly 1.4 billion deliveries entered the United States under the disposition during the last financial year, according to customs data.
The abolition of the exemption could force certain Chinese companies to repercuss the additional cost to customers, which makes their goods less competitive in the United States.
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US President Donald Trump has announced prices on 180 countries and territories
When taken together, this is a disturbing photo for Beijing, said Deborah Elms of the Hinrich Foundation Consultancy.
“I do not think that new prices are necessarily intended for China. But when the United States stack prices on each other, especially towards China, the figures become fairly quickly.”
“China and the Chinese will have to retaliate. They will not be able to sit down and watch this,” she said.
Supply chain
Trump also imposed heavy prices, ranging from 46% to 49%, on Vietnam, Laos and Cambodia.
This represents “a complete assault on the prolonged Beijing supply chain,” said Stephen Innes of the investment company SPI ASSET Management.
“Vietnam … and others on the outskirts are collateral damage in what promises to be the most aggressive realignment of American trade policy in a generation,” he added. “It is not a tit-for-tat-it is a strategic confinement via the tariff war.”
Laos and Cambodia, which are among the poorest countries in the region, depends on Chinese investment in the infrastructure of the supply chain. High tariff rates should hardly reach both countries.
China is Vietnam’s largest trading partner. It was one of the main beneficiaries of American-Chinese tensions during Trump’s first term.
In 2018, Trump struck China with prices, which rethought some companies where they made their products. Some have chosen to move manufacturing to Vietnam.
This has led to an increase in exports from Vietnam to the United States, with Chinese companies that have moved production to this figure.
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Some Chinese companies manufacture factories in southeast Asia in Southeast Asia
“Vietnam was clearly targeted (by Trump) because of its role as conduct for the bypass by the China of previous prices,” former American commercial negotiator Stephen Olson told the BBC.
While the United States remains the largest export market in Vietnam, China is its largest supplier of goods, representing more than a third of imports, according to the latest official data.
Chinese companies were also behind almost a new in three investment in Vietnam last year.
Pushan Dutt, professor at INSEAD Business School, said that new taxes on Southeast Asia are “prohibitive” for China.
“China has a problem with demand and, in the last Trump administration, their businesses reacted to the prices by slowing down the supply chains and moving them to (southeast nations of Asia). This door has been closed,” he added.
But Trump’s taxes in the region will also have an impact on American companies that make goods in Southeast Asia.
For example, American companies, including technology giants, Apple and Intel, and the Nike sportswear giant have large factories in Vietnam.
A recent investigation by the American Chamber of Commerce in Vietnam has revealed that most American manufacturers expect to dismiss staff if prices are imposed.
‘Difficult choices’
There is the question of what China can do to answer the new prices, since it has only days before taking effect.
Olson said he is expecting Beijing to have an “energetic” response with prices and other measures, which makes American companies more difficult to operate in China.
The Chinese economy is already confronted with challenges, Beijing faces “difficult choices” in the coming days, said Professor Dutt.
“Export to other regions threatens deindustrialisation in these destinations – and political leaders, it is unlikely that this accepts this.
The prices could also push China to try to build alliances with other Asian nations that have been at the reception of the prices.
Wang Huiyao, a former member of the Chinese Communist Party who works with the Center for China and Globalization Think Tank, called on Asian countries to “work together to go through this difficult period and fight protectionism”.
“In the end, the United States could lose all the influence and isolate itself,” he added.
Some discussions are already underway. China, South Korea and Japan recently organized its first economic talks in five years.
They agreed to accelerate talks for the free trade agreement – which was proposed for the first time more than a decade.
The new prices could give them an additional incentive to do so.
However, Beijing could face short -term pain while the talks with Washington are undergoing its course.
“In the end, the United States and China are heading for a negotiating table where it will try to reach a type of high market on a wide range of questions,” said Olson.
“It will not necessarily happen soon and I expect things to get worse before they improve,” he added.
