Washington has already imposed tariffs on all Chinese goods entering the United States. This time, the newly elected President of the United States, Donald Trump, has threatened to impose an additional 10 percent tariff on that tariff. He said that he will implement this matter immediately after assuming office on January 20. However, the Chinese embassy in Washington said on Monday that neither the United States nor China will win if a new trade war begins.
According to news agency Reuters, Liu Pengyu, spokesperson of the Chinese embassy in Washington, said in a statement on Monday, “China's view on the imposition of tariffs on China by the United States is that the economic and trade cooperation between China and the United States is mutually beneficial.” No one can win a trade war or a tariff war.'
Earlier, Trump said on Monday that he would impose a 25 percent tariff on all goods entering the United States from Mexico and Canada in an executive order immediately after taking the oath of office on January 20. An additional 10 percent tariff will be imposed on China until the country stops trafficking fentanyl, a drug synthesized from opium.
Fentanyl is a drug commonly used as a pain reliever. It is 50 to 100 times more potent than morphine or heroin, and its overdose or abuse is extremely dangerous. The US administration estimates that 75,000 people died from fentanyl overdoses last year. For this reason, the Biden administration has been pressuring Beijing to stop the production of raw materials for fentanyl.
However, referring to such US claims, Liu said in the statement, 'China has taken steps to curb drug trafficking, which was made possible by an agreement between President Joe Biden and Chinese President Xi Jinping last year. The United States has been informed of China's progress in drug-related law enforcement activities in the United States.
A spokesperson for the Chinese embassy in Washington added, 'The idea that China is deliberately allowing chemicals containing fentanyl to flow into the United States has been proven completely false and untrue.' But the reality is that progress on stopping the illegal entry of chemicals used to make fentanyl into the U.S. has been slow since Biden last year agreed to restart joint efforts to stop drug trafficking.
Earlier, during his election campaign, Trump threatened to impose tariffs of up to 100% on Mexico and China if necessary. Besides, he said, China is the most-favored nation from the US in terms of tariffs and other restrictions. He will remove this special advantage of China.
After Trump threatened to impose the tariffs during the election campaign, many economists warned that the tariffs would hurt the country's economic growth and increase inflation. This duty is mainly paid by importers. Therefore, the additional cost due to the imposition of tariffs will increase the price of the product.
Those close to Trump, meanwhile, claim the tariffs would help importers negotiate more favorable trade deals and push for manufacturing jobs moved overseas to come back to the United States.
According to a Bloomberg Economics model, Trump's proposed tariffs would reduce imports of Chinese goods to the United States by about 50 percent and imports of U.S. goods to China by about 90 percent. That means there will be almost no trade between the US and China.
Even if China or other countries do not retaliate, US exports will drop by about 40 percent. Tariffs on imports would raise the price of foreign goods and make U.S. exports less competitive. If other countries retaliated, U.S. exports would drop by about 60 percent. If imports and exports fall together, the US trade deficit will remain the same.
