U.S. President Donald Trump announced the policy of imposing a 10% tariff on China again. This is the second time since the launch of Trump's second term. China retaliated with counter-tariffs and resource controls when the first tariff was imposed, and attention is focused on what strategy it will use to respond to Trump this time. The timing of the additional tariffs announced by Trump coincidentally aligns with the start date of the 'Two Sessions' (National People's Political Consultative Conference and National People's Congress), during which China announces its economic growth target and economic policy direction.
On the 27th (local time), Trump announced through social media platform Truth Social that he would impose an additional 10% tariff on China starting March 4. This is because China is deemed partly responsible for the influx of the synthetic drug fentanyl into the U.S. Trump had already imposed a 10% tariff on China for the same reason on the 4th. On the same day, Trump met with reporters and reiterated, "This is an additional tariff on the one that went into effect on the 4th. It's 10 plus 10. Another 10."
Attention is concentrated on China's response as it receives its second tariff bill in a month. After 6 days following the start of Trump's first imposition, China opted for countermeasures on the 10th of last month, rather than negotiations. They imposed a 15% tariff on U.S. coal and liquefied natural gas (LNG), and a 10% tariff on U.S. crude oil, agricultural machinery, and large pickup trucks. In addition, they began export controls on rare minerals such as tungsten, which China dominates 80% of production, and initiated sanctions against corporations such as Google, fashion company PVH Group which has Tommy Hilfiger and Calvin Klein under it, and biotech company Illumina.
There has been no response from the Chinese side yet, but some Western experts believe that China may also choose to retaliate this time. The timing of Trump's second tariff imposition on the 4th of next month is particularly concerning. That day marks the beginning of the 'Two Sessions,' China's largest annual political event. Furthermore, the government’s economic growth target for this year is expected to be announced on the 5th. It is anticipated to be set around '5%' like last year, but considering the impact of the U.S.-China trade war, it is generally viewed as an aggressive target.
Analysis suggests that China may adopt a 'strong against strong' strategy to show it will not succumb to Trump's attacks. The Hong Kong South China Morning Post reported, "If Trump acts on the threats across various domains, trade partners will inevitably have to impose tariffs, and global competition is likely to be repeated and heightened." Reuters reported that in addition to the maximum 25% existing tariffs imposed during Trump's first term, the new tariffs could reach 20%, leading Beijing to respond more aggressively. According to the U.S. Census Bureau, Chinese products imported by the U.S. last year amounted to $439 billion (approximately 637.8 trillion won).
However, there are indications that the first 10% tariff and the additional tariffs this time are different. It was relatively clear that the Trump administration would impose tariffs on China as it entered its second term, so there was a strong internal atmosphere in China that they were 'prepared' during the first imposition. Some responses indicated that it was rather fortunate that the level was lower than expected. While it still falls short of the '60% tariff on China' Trump promised during his election campaign, the gradually increasing pressure may begin to reveal some damage to China. Christine McDaniel, a senior researcher at the Mercatus Center at George Washington University, noted, "The lack of clarity in Trump's demands to China has increased the likelihood that this measure will be implemented," adding, "Currently, it seems that it will cost China more than the U.S."
Observations suggest that China may maintain a cautious mode while seeking countermeasures. Chinese President Xi Jinping ordered the Communist Party leadership and government departments on the 26th to "strengthen political capabilities and calmly respond to challenges arising from changes in domestic and international circumstances, maintaining the overall principle of 'seeking progress while ensuring stability'.” This underlines the need to respond appropriately to conflicts such as tariff pressures following the launch of Trump's second administration. Bloomberg noted, "At least for now, there are signals that China will take a more cautious approach to America's limited policy."
There are also observations that China may enter negotiations with the U.S. The U.K. Financial Times reported, "Over the past month, China has been trying to determine whether Trump wants a tight (specific sectors) trade negotiation or a more comprehensive agreement," adding, "Chinese officials and government advisors have informally sent signals that China is willing to buy more U.S. products to reduce the trade deficit between the two countries, and sources also indicated that Chinese corporations could create 500,000 jobs by investing in the U.S."