The trade war between the United States and China has taken a dramatic turn, with China slapping retaliatory tariffs of 84% on US products following the US raising tariffs on Chinese imports to 104%. The escalation has resulted in an additional hike in tariffs, with the US now increasing the tariff on Chinese imports to 125%. The bilateral trade tensions between the two countries have intensified over the years as President Donald Trump and Chinese President Xi Jinping waged a tit-for-tat tariff war.
A Timeline of the US-China Trade War
Early Tensions (2017-2018): The trade war started in April 2017 when Trump and Xi Jinping signed a 100-day plan to cut the US trade deficit. Negotiations, however, broke down by July, and the US initiated an investigation into Chinese intellectual property theft.
Early Tariffs (2018): The US put a 30% tariff on solar panels that were imported from China, as China held the market's commanding position. China responded by placing tariffs on $3 billion in US products, including agricultural goods and aluminum.
Escalation (2019): The US imposed tariffs of 25% from 10% on $200 billion of Chinese imports. China retaliated with extra tariffs on US agricultural products. The trade war escalated to the tech arena, with America banning Huawei from using American technology.
Phase One Trade Agreement (2020): The US and China agreed on a phase one trade agreement, where China promised to purchase another $200 billion worth of US products over a period of two years. Targets were never achieved.
Recent Developments (2024-2025): The Biden administration raised tariffs on Chinese electric vehicles, solar cells, and medical equipment. Trump imposed 10% tariffs on all Chinese imports, and China responded by imposing duties on US coal, gas, and farm machinery.
Current Situation
The latest escalation has prompted a sharp rise in tariffs, with China laying on 84% tariffs on US imports and the US imposing 125% tariffs on Chinese imports. China has promised to "fight to the end" in response to what it calls "economic coercion." The trade conflict has caused market volatility, with investor sentiment rocked by the uncertainty of US trade policy.
Global Implications
The US-China trade war has enormous effects on the global economy. China urged other countries, including India, to counter "US tariff abuse." The European Commission also plans to impose counter-tariffs on US products. Since China vowed to battle till the end, the global economic structure is bound to keep experiencing instability as the two superpowers play their trade war ¹ ².