The White House said China is facing up to a 245 percent tariff on imports to the U.S. “as a result of its retaliatory actions,” as the trade war between the world’s two largest economies continues to heat up.
The top potential tariff was referenced in a fact sheet published by the White House late on Tuesday.
It accompanied an executive order signed by President Donald Trump that launched an investigation into the “national security risks posed by U.S. reliance on imported processed critical minerals and their derivative products.”
A White House official told Newsweek the calculation reflects the maximum potential rate some Chinese goods could face, combining the reciprocal tariff, the fentanyl tariff, and existing Section 301 tariffs that go up to 100 percent.
Electric vehicles, for example, have outstanding Section 301 tariffs of 100 percent dating back to the Biden Administration, meaning these products would face a 245 percent rate in total.
The U.S.-China trade war is rattling global markets, which fear the economic fallout of the conflict and others that Trump has launched against America’s trading partners.
Cutting off Chinese imports complicates American supply chains, increasing costs and forcing businesses to source from elsewhere. Consumers also face higher prices. Trump’s strategy is to use tariffs to pull more manufacturing investment into the U.S.
For many Chinese exporters, all but losing the U.S. market is a severe blow, and they will have to grow in other markets to replace the loss, such as in the European Union (EU). China’s export-reliant economy was already slowing down.
The Trump administration, though, is cranking up the pressure on China and wants its trading partners to make a choice between Beijing and Washington.
Chinese Foreign Ministry spokesperson Lin Jian was asked about the 245 percent rate at a press briefing on Wednesday. “You can ask the U.S. side for the specific tax rate figures,” Lin said, China News Network reported.
“China has repeatedly stated its solemn position on the tariff issue.
“This tariff war was initiated by the United States, and China’s necessary countermeasures are to safeguard its legitimate rights and interests and international fairness and justice, which are completely reasonable and lawful.”
Trump imposed a 10 percent tariff on imports from all countries. He has temporarily paused additional “reciprocal” rates set individually for each country depending on the trade barriers faced by the U.S. to allow time for negotiations on new deals.
The exception to that pause is China, which is facing increasingly higher tariffs from the U.S. and has responded in kind, among other countermeasures. The U.S. has imposed a 125 percent reciprocal tariff on China, plus a 20 percent tariff related to fentanyl.
This week, China imposed more export controls on rare earths, which include materials used in high-tech products, aerospace manufacturing, and the defense sector.
The Trump administration had warned countries not to retaliate against its tariffs and that they would be rewarded for doing so.
Meanwhile, China appointed Li Chenggang as its new trade negotiator on Wednesday in the midst of its tariff fight with the U.S, a move that may signal a change in style from Beijing.
Prior to his new appointment, Li spent about four-and-a-half years as China’s ambassador to the World Trade Organization (WTO), the body that governs global commerce and to which Beijing has appealed in its tariff dispute with the U.S.
He was also deputy permanent representative to the Chinese delegation to the U.N. office in Geneva and other international organizations in Switzerland.
Li participated in negotiating China’s accession to the WTO more than 20 years ago.
“There might be another style of negotiations. Li Chenggang is an open-minded person and supports free trade,” said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics.
Chinese Foreign Ministry spokesperson Lin Jian said: “There is no winner in tariff wars and trade wars, and China does not want to fight, but it is by no means afraid to fight.”
President Trump wrote on his Truth Social platform on April 13: “NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!” Trump wrote on his Truth Social platform on April 13.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations.
“What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People.”
Despite the eye-watering tariffs and tough rhetoric, both the U.S. and China have said they are open to talks on trade, though further tit-for-tat retaliation is likely in this conflict between two great powers.
Separately, the Trump administration is discussing trade deals with at least 15 countries that have approached it to negotiate. It may use those talks to squeeze China by giving America’s partners an ultimatum: better terms with us or shut out with China. – Newsweek.
