Did Trump's tariff threats help China increase exports? | Donald Trump News

US President Donald Trump said on Tuesday he was considering imposing a 10% tariff on imports from China, which could take effect as soon as February 1.

It was Trump's latest trade threat against China, the world's second-largest economy after the United States and Washington's biggest geopolitical rival. During the campaign that ultimately led to his reelection, Trump threatened to impose tariffs of up to 60 percent on Chinese goods, escalating the ongoing trade war.

Yet if the intent of the proposed tariffs was to harm Chinese exports, with the aim of promoting U.S. interests in its trade dealings, Trump's threats so far appear at least to have had the opposite effect.

China's overall exports, including to the United States, have increased in recent months.

So why is Trump threatening China with tariffs, how are Chinese exports continuing to rise, and what's next in their trade fight?

Why is Trump threatening China with higher tariffs?

On Tuesday, Trump claimed that China was behind the supply of fentanyl to the United States' neighbors, which he said was in turn responsible for a deadly addiction crisis in the country.

A day earlier, he said he was considering imposing 25 percent tariffs on Mexico and Canada, alleging those countries were allowing large numbers of people and fentanyl into the United States. He also announced the creation of a foreign revenue department which would collect our tariffs, duties and all revenues from foreign sources.

By the end of 2024, Chinese exports to US companies increased, increasing by 4% between November 2023 and November 2024.

But more broadly, Trump has also accused China of unfair trade practices. China, the world's largest exporter, enjoys a huge trade advantage with the United States. In the first 11 months of 2024, Chinese exports to the United States totaled approximately $401 billion, while China imported approximately $131 billion worth of goods from the United States.

Did Trump's tariff threats make a difference?

It seems that this is simply not what the United States could have wanted. As Trump's inauguration approached and the threat of tariffs on Chinese imports grew, U.S. companies stepped up their purchases of Chinese goods to stock up on supplies before import costs exploded.

In November 2024, Chinese exports to the United States amounted to $47.3 billion, compared to $43.8 billion in November 2023, according to the Observatory of Economic Complexity (OEC). This represents an increase of 8 percent.

Meanwhile, Chinese imports from the United States fell by 11.2%, from $14 billion to $12.4 billion in November 2024 compared to November 2023. Simply put, amid Trump's threats, the United States' trade deficit with China has widened.

Although the U.S. government data differs somewhat from the OECD data, it points to the same trend. Between July and November 2024, U.S. imports from China reached approximately $203 billion, an increase of 6.8% from $190 billion during the same five months of 2023.

China's overall exports have also exploded. Last month, China's total exports hit record levels, rising 10.7% in December from a year earlier, beating analysts' estimates. Total exports for 2024 reached $3.58 trillion, an increase of 5.9% from 2023.

China's trade surplus hit a record $992 billion in 2024, an increase of 21% from the previous year, as customs reported on Monday.

And there could be more bad news for the United States.

Although the influx temporarily fueled China's trade surplus, broader trade relations have been undermined by U.S. policy, Carlos Lopes, Chatham House associate fellow for the Africa program, told Al Jazeera.

Escalating tariffs and continued unilateral measures could worsen the erosion of confidence in the global trading system, further pushing China to diversify its partners and reduce its dependence on the US market, said Lopes, whose areas of expertise include international trade and China.

The current surge may offer short-term gains for both economies, but it highlights the fragility of a system increasingly dominated by trade wars and unpredictability.

What is Trump's tariff war?

Trump has announced plans for tariffs on China, Canada and Mexico since taking office, but many other countries around the world are also preparing for similar measures.

He initially launched a tariff war against China during his first term, and by 2018 the United States and China were imposing tariffs on each other.

While a truce in the US-China tariff war was announced in January 2020, Joe Biden ultimately continued Trump's policies after winning the presidential election in 2020, despite his criticism during his campaign electoral.

In May 2024, the Biden administration revised Section 301 of the Trade Act and imposed higher tariff rates, from 25 to 100 percent, on certain Chinese imports. Electric vehicles and solar cells were among the products affected.

The Biden administration's tax imposed restrictions on trade and technology with China that will be difficult for Trump to reverse, said Manoj Kewalramani, chair of the Indo-Pacific Research Program and a China studies scholar at the Indian public policy center Takshashila Institution. Al Jazeera.

China lost its position as the United States' top trading partner to Mexico in 2019, three years after Trump was elected president in 2016. As of November 2024, the United States' top trading partners were Mexico , with a total of $69.1 billion. exchange that month; Canada, with total trade of $61.8 billion; and China, with total trade of $50.5 billion.

Trump sees the tariffs as important, not only from an economic point of view, but also from a negotiating point of view, Kewalramani said, adding that there could be tariff negotiations similar to those in January 2020. But they might not happen immediately, he added. said.

The timing of tariffs is often subject to political maneuvering and administrative processes, and the lack of transparency of these decisions undermines the predictability of the trading system, Lopes said.

Unilateral actions by the United States, without consulting trading partners or respecting multilateral norms, create uncertainty for businesses and investors. This unpredictability not only disrupts supply chains, but also weakens confidence in the already strained rules-based global trading order.

These tariffs are intended to help the United States close its $1.9 trillion deficit. However, Lopes said, “getting out of the deficit requires more than tariffs or protectionist measures; it requires strategic investments in technology, infrastructure and workforce development.

What will US-China relations look like under Trump 2.0?

The United States and China are the largest economies in the world. The United States' gross domestic product (GDP) in 2023 was $27.36 trillion, according to World Bank data, compared to China's $17.79 trillion.

What will happen in terms of tariffs under Trump 2.0 is unpredictable. It will be necessary to wait and see whether a figure close to 60 percent will be reached, Kewalramani said.

Of the 26 executive orders signed by Trump on the day of his inauguration, one of them delays by 75 days the implementation of the ban on the popular short video application TikTok, which is owned by the Chinese company ByteDance. However, he threatened to impose tariffs on China if it did not approve a possible US deal with TikTok, according to the Reuters news agency.

Trump invited Chinese President Xi Jinping to his inauguration, attended by his deputy, Han Zheng. Kewalramani posited that Trump and Xi would continue to engage, as would Biden and Xi, despite the broad restrictions imposed on China by the Biden administration.

China has already demonstrated resilience by diversifying its trade partnerships and doubling down on domestic innovation. It will likely expand its Belt and Road Initiative [BRI] and invest heavily in advanced sectors like green energy and technology to maintain its export competitiveness, Lopes said.

The BRI is a network of highways, ports and railways that China is building. This global infrastructure should better connect Asia to Africa, Europe and Latin America.

Importantly, China will benefit from the United States' unilateral approach as it positions itself as an advocate of multilateralism, creating new opportunities to fill the void left by the United States in global trade leadership. . Instead of isolating China, U.S. actions risk furthering its integration into alternative economic networks, thereby weakening the very influence the United States seeks to maintain.

How will consumers be affected?

I expect tariffs to increase, but maybe not as much as 60 percent, Kewalramani said, adding that high tariffs would cause a significant cost explosion for U.S. consumers.

According to the Congressional Budget Office (CBO), a nonpartisan federal agency, Trump's tariff policy would boost inflation and shrink the economy, but there are caveats.

A December CBO report on the effects of tariff increases projected a 1 percentage point rise in inflation by 2026, which could cost American families an average of $1,560 a year, according to an assessment by The Budget Lab, a nonpartisan policy research center at Yale.

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