On April 9, after President Donald Trump halted his “reciprocal tariffs” on key trading partners, he increased tariffs on goods from China. These tariffs on most Chinese imports have now reached 145 percent, and in response, China has imposed its own 125 percent tariffs on US products.
Trump has frequently accused China of taking advantage of the US in trade, positioning his tariffs as essential for boosting American manufacturing and bringing jobs back to the country. He also intends to use these tariffs to help finance tax cuts. However, most economists are doubtful that he will achieve these goals.
Currently, the US and China are engaged in a tense standoff, and the world is eagerly watching to see which side will back down. As Trump approaches his second term’s first 100 days, here is the current status of the tariff conflict with China:
What’s the latest on negotiations?
Recently, Trump hinted at the possibility of reaching a trade agreement with China. On April 23, he indicated that tariffs on Chinese goods would “come down substantially” soon.
“We’re going to have a fair deal with China,” Trump told reporters, raising hopes for a potential easing of tensions. He mentioned that his team is “actively” negotiating with China, although he did not provide details.
However, on April 24, China’s Ministry of Commerce dismissed Trump’s claims, stating that no discussions were currently happening between the two nations.
“Any assertions about the progress of China-US economic and trade negotiations are unfounded and lack factual support,” said ministry spokesperson He Yadong.
While he stressed that Beijing would not avoid economic challenges from Washington, he also reiterated that the door remains “wide open” for discussions.
A report from Reuters also indicated that China was looking into exemptions for certain US imports, potentially involving up to 131 products.
No official statement on this matter has been made by Beijing.
Have US exports been affected by the tariff war?
Trump implemented his extensive tariffs on China just three weeks ago, but the full impact on US businesses is expected to unfold later this year. Nonetheless, troubling signs are already apparent.
Data from the US Department of Agriculture indicates a significant drop in soybean exports—the largest US agricultural export—for the week of April 11-17, which was the first full week of reporting following the tariff announcement.
By April 17, net sales for US soybeans had plummeted by 50 percent compared to the prior week, largely due to a 67 percent decline in weekly soybean exports to China, which had been the primary market for this crop.
Piergiuseppe Fortunato, an adjunct economics professor at the University of Neuchatel in Switzerland, noted, “China’s retaliatory tariffs will severely impact US farmers. Some may face bankruptcy.” He added that all sectors dependent on China will likely feel the strain.
In 2023, the US sold approximately $15 billion worth of oil, gas, and coal to China, and losing that market would have serious repercussions for US energy companies.
Will imports to the US be affected?
Since the onset of Trump’s tariff conflict, shipments have dramatically decreased. As reported by Linerlytica, a shipping data service, Chinese shipping bookings to the US fell by 30 to 60 percent in April.
This significant drop in shipments from China—America’s third-largest trading partner after Canada and Mexico—hasn’t yet been felt. However, in May, many companies will need to replenish their stocks.
According to Bloomberg News, major retailers like Walmart and Target informed Trump that consumers may soon face empty shelves and higher prices as early as next month, warning that supply shortages could extend into the holiday season.
In 2022, electronic items, including TVs and washing machines, accounted for 46.4 percent of US imports from China. Additionally, a considerable amount of clothing and pharmaceutical ingredients are imported from there, indicating that prices for these goods are poised to rise next month.
On April 22, the International Monetary Fund raised its inflation forecast for the US to 3 percent for 2025—one full percentage point higher than its previous prediction in January. The IMF also lowered its growth projections and warned that the US economy could enter a recession this year.
What will be the impact on China’s economy?
Despite rising tensions, trade between the US and China remains substantial.
Last year, the US imported $438.9 billion in Chinese goods, according to the US Trade Representative’s Office.
This figure represents about 3 percent of China’s overall economic output, which continues to heavily rely on exports.
In a recent report, Goldman Sachs estimated that Trump’s tariffs could lower China’s GDP by up to 2.4 percentage points.
Meanwhile, Chinese officials have stated that the country can forgo American agricultural and energy imports and remain committed to achieving a 5 percent GDP growth target this year.
Zhao Chenxin, vice head of the National Development and Reform Commission, mentioned that domestic production, along with imports from other countries, would meet demand.
“Even without US feed grains and oilseeds, our grain supply will not be greatly affected,” Zhao noted.
Experts suggest that China may have been preparing for this scenario for some time.
Fortunato explained to Al Jazeera: “While the US is one of China’s biggest export markets, tariffs will indeed slow GDP growth. However, Beijing has been smart about this, as it began diversifying imports away from the US during the previous trade war in 2018.”
He also highlighted that “the US relies on China for up to 60 percent of its essential mineral imports, which are critical for clean energy and military technology. The reverse is not true, making the US more vulnerable.”
Is the US at risk of losing its geopolitical influence?
Trump has openly expressed his desire to rally US allies against Beijing. The administration aims to establish free trade agreements with the European Union, Great Britain, and Japan.
In broader terms, reports indicate that the US is urging its trade partners to reduce their economic ties with China in exchange for relief from Trump’s “reciprocal” tariffs.
Nonetheless, US allies appear largely averse to engaging in a conflict with China. Recently, the European Commission stated its intention not to “decouple” from China.
In the UK, Chancellor of the Exchequer Rachel Reeves told the Daily Telegraph, “China is the world’s second-largest economy, and it would be very unwise to disengage.”
Many nations are not positioned to sever their trade connections with China. The EU, for instance, has a substantial trade deficit with China, and halting access to Chinese goods—both consumer products and industrial inputs—could hurt its already sluggish economy.
In the developing world, China’s role in trade is similarly crucial. Approximately 25 percent of imports in Bangladesh and Cambodia originate from China. Countries like Nigeria and Saudi Arabia also heavily depend on Chinese imports.
“It’s difficult to see why nations would want to jeopardize their own economic interests to reduce the US trade deficit with China,” Fortunato concluded. “Given this, I believe Trump may be myopic and could ultimately be compelled to reduce tariffs with China first.”
Is Trump losing support among Republican voters?
Unlike the Chinese Communist Party, which does not face elections, Trump’s Republican Party does, giving Beijing an advantage in the ongoing trade conflict. Simply put, China has more time on its side.
For Trump’s party, his aggressive stance may already be taking a political toll. A recent Economist-YouGov poll revealed that Americans believe Trump’s economic policies have negatively impacted them by a 30-point margin.
Public support for Trump’s handling of the economy has been low for some time, with his approval rating dropping to 37 percent in a Reuters-Ipsos poll released on March 31—his lowest ever in that survey.
Should Trump continue with his current approach, it is likely his approval ratings could decline further, creating risks for the Republican Party’s tenuous control of the House of Representatives and possibly the Senate, according to experts.
“For these reasons,” Fortunato observed, “China is under no pressure to hasten negotiations for a trade deal. That pressure likely falls on Trump instead.”
