Trade war escalates: How China will get hit by Trump’s latest offensive
Tuesday’s threat from the U.S. of a round of 10 percent tariffs on an additional $200 billion worth of Chinese imports could deliver a major blow to China’s export sector if it takes effect.
The new list shows that Washington is targeting key Chinese manufacturing export industries, said Rajiv Biswas, Asia Pacific chief economist at IHS Markit. By listing potential tariffs on goods including refrigerators, cotton, and steel and aluminum products, the Trump administration is going after China’s electronics, textiles, metal products and auto parts industries.
“For China, the US is its largest export market, accounting for 19% of total Chinese exports. Therefore, if the US escalates its tariff measures to an additional USD 200 billion of products, this would mean that around half of Chinese exports of goods to the US would face significant US punitive tariff measures,” Biswas said in a note.
“China’s export sector will therefore suffer a significant deterioration in export competitiveness to the US compared to other emerging markets’ manufacturing exporters, such as Vietnam, South Korea, Thailand, Bangladesh, Mexico and Brazil,” he added.
Moreover, the list seems to have been carefully curated, according to Vishnu Varathan, head of economics and strategy at Mizuho Bank.
“The Chinese imports picked are done with a view to minimize self-harm, and so the impact on U.S. consumers have been carefully considered,” Varathan told CNBC, adding that may explain why mobile phones have been omitted.