The United States will impose an additional 10% tariff on Chinese imports, doubling the existing 10% duty as of Tuesday. This development comes as part of President Donald Trump’s strategy to exert pressure on China, despite the potential for escalating trade tensions. Treasury Secretary Scott Bessent has emphasized that these tariffs are unlikely to cause inflation in the U.S., asserting that China will bear the cost due to its export-driven economy.
China has responded to the U.S. tariffs by raising duties on certain American energy imports and adding two U.S. companies to an unreliable entities list. The Ministry of Commerce in China has expressed strong opposition to the tariff hikes, warning of retaliatory measures if necessary.
"If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests." – A Ministry of Commerce spokesperson
In a bid to align with U.S. policies, Mexico has proposed matching the U.S. tariffs on China, while Canada has yet to make a similar offer. Bessent has urged Canada to consider Mexico's approach, indicating that announcements from these nations could occur as soon as Tuesday.
"We'll see. The Mexican leadership has offered to do that," – Bessent
The tariffs are intended to take effect this Tuesday, potentially setting off a chain reaction among global trade partners. While Canada remains undecided, Mexico's proactive stance adds a layer of complexity to the unfolding situation.
"or maybe the tariff wall goes up, and then we see what happens from there." – Bessent
Furthermore, President Trump is expected to impose a 25% tariff on imports from both Mexico and Canada. This move could reshape North American trade dynamics, leading to significant economic implications across the continent.
Bessent remains confident in the U.S. strategy, stating he is not concerned about China's ability to handle the tariffs. He believes China's reliance on exports will necessitate adaptation to the new trade environment.
"Well, we don't know yet because it's path-dependent, but what I can tell you is that I'm not worried about China," – Bessent
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