Reports from China show that Beijing has decided to impose a heavy tariff of 34 per cent on the US from next week. This will affect trade in some of the rare earth metals and deepen the already strained relations between the two powers.
Trump announced tariffs on more than 180 countries earlier on Wednesday. Other than the already imposed 20 per cent he increased the rates on China by 34 per cent making it bear a huge tariff rate of 54 per cent. In a move to retaliate this action by President Trump, China has also declared tariffs indicating that there will be no end to this trade war in the near future.
The new rates by China will come into effect by 10 of this month. Before this, China had also imposed a 15 per cent tariff on LNG imported by the US, this was also a reaction to the high tariff of 10 per cent imposed by the US. It went one step ahead and declared that in addition to tariffs, it would also regulate exports that were going to the North American nation. These restrictions are targeted to the export of medium and heavy earth metals including the likes of gadolinium, samarium, terbium, and lutetium. It has also added some US-based entities to its list of restricted exports. 16 of them are part of the export control list and 11 are declared “unreliable entities”.
The Chinese Ministry of Commerce in a statement said that this is done to safeguard its national territory and follow the international law of “non-proliferation”. Trump however has been vocal about China’s move and this was reflected in his latest social media post written in block letters.
China played it wrong, they panicked- the one thing they cannot afford to do.
China certainly seems furious and unhappy with Trump’s move and to undo this it has decided to move to the World Trade Organisation(WTO). On Friday China declared it has moved to the WTO and opened a complaint against Trump’s harsh policies. In the complaint, China claims that the tariffs imposed on the country are violative of WTO’s rules.
The permanent mission of China to the WTO said that “China has filed the WTO complaint with respect to the United States’ measures.” These events hint at the new era of post-globalisation reflecting the need to focus on domestic manufacturing to stay immune from global pressures.
