In the wake of U.S. President Donald Trump’s latest announcement on new tariffs to be imposed on 69 trading partners ranging from 10% to 41%, China has reiterated a stern warning against protectionism amid growing concern that it will “harm the interests of all parties”. “China’s position against the arbitrary imposition of tariffs has been consistent and clear: there are no winners in tariff or trade wars,” Guo Jiakun, Spokesman for the Ministry of Foreign Affairs, said at a press conference. The announcement included a 35% duty on many goods from Canada and 39% on imports from Switzerland. Most of the tariffs are due to take effect this week. Most Asian economies will face a levy of 15% to 20%, but exceptions include India at 25%, and Laos and Myanmar at 40%. Taiwan will face a 20% tariff.
“The new rates preclude the worst but are cold comfort,” said Alex Holmes, Regional Director of Asia at the Economist Intelligence Unit (EIU). “They represent a big rise in trade barriers and leave plenty of questions unanswered. “Tariff rates settling at 15% to 20% for most of the region outside of China will hurt producers, narrow profits along the supply chain, and curtail U.S. demand,” he said.
Holmes contended that, without clarity on sector-specific tariffs, a lower overall rate offers little reassurance. For example, while South Korea has agreed with the U.S. on a 15% export tariff covering items such as cars – a major decrease compared with the 25% general auto import tariff – uncertainties remain regarding tariffs on electronics, which comprise the region’s largest export sector, by far. Trump reached a deal with South Korea, the European Union, Japan, Indonesia and the Philippines.
Most of Trump’s new tariff rates will take effect on August 7, except for Canada, which will face the new duties immediately, and Mexico, which was granted a 90-day negotiation period, with its tariff temporarily set at 25%. Trump also issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35%, from 25% previously, claiming that Canada had “failed to cooperate” in curbing illicit narcotics flows into the U.S.
Earlier last week, following the third round of trade talks with the U.S. in Stockholm, China said that both sides had reached a consensus to extend their “tariff truce” by another 90 days, while the U.S. side insisted that the deal was still pending the President’s explicit approval. If nothing unexpected happens, the U.S. will continue to impose 30% additional tariffs on China after August 12, when the original truce is due to expire, the South China Morning Post reports.
