CNN: Trump's escalating tariffs on China set to trigger economic pain for US consumers

President Donald Trump has ramped up his trade war with China, marking a confrontation with the world’s second-largest economy that could significantly impact American consumers. 

The new tariffs, which will see goods entering the US from China subject to duties as high as 104%, represent the latest chapter in Trump's aggressive global trade policy, and they hold the potential for severe economic backlash, Caliber.Az reports, citing CNN.

This latest escalation follows years of US efforts to address what it sees as unfair trade practices by China, which has evolved from an emerging market to a global superpower eager to challenge American dominance. Over decades, the US has attempted to shape China's integration into the global system, but recent tensions suggest that this long-standing approach has failed, with Trump's actions now exposing the failure of previous administrations' strategies.

Trump’s populist rise, partly fuelled by dissatisfaction over globalisation, led him to adopt a hardline stance on trade, particularly with China, which many critics accuse of undermining US industries. Trump’s trade policies, including aggressive tariffs, were presented as a response to decades of job losses in manufacturing, but so far, Beijing has refused to back down.

The latest tariff threats come after China rejected Trump’s warnings not to retaliate against previous duties. In response, Beijing has vowed to continue its defiance, even amid escalating tensions. White House Press Secretary Karoline Leavitt reiterated that Trump’s leadership is unwavering, stating, “President Trump has a spine of steel, and he will not break. America will not break under his leadership.”

Trump’s approach is seen as impulsive and lacking a clear strategy, and there are concerns that the US is ill-prepared for China’s resilience. If Trump believed that his relationship with Chinese President Xi Jinping would lead to a quick Chinese capitulation, he may be mistaken. Beijing is showing no signs of bending and has been preparing for a prolonged economic standoff.

Xi, who has portrayed himself as a champion of China’s resurgence, would view any concession to the US as a loss of face and a setback to his image as the leader of a rising global power. This has been compounded by anti-American rhetoric in China’s media, which criticises the US for its perceived decline and weakness.

China's confidence in the face of escalating trade hostilities is also rooted in its technological progress and self-reliance. Xi’s strategy has led China to develop robust domestic capabilities in critical industries, such as artificial intelligence and electric vehicles. With these strengths, Beijing believes it can endure the impact of US tariffs and inflict retaliatory damage on the US economy.

While Trump faces political pressures at home, particularly with upcoming elections, Xi’s leadership is not constrained by such concerns. The US president’s confrontational approach could come at a significant cost to the American economy, potentially fueling inflation and stalling growth. The tariffs could lead to price hikes on essential goods, such as smartphones and computers, disproportionately affecting American consumers. The broader economic consequences, including inflationary pressures and GDP drag, are expected to reverberate across industries, with small businesses particularly vulnerable.

China has various tools at its disposal to retaliate, including restricting access to rare earth minerals vital for the US tech industry, imposing trade barriers on US agricultural products, and tightening regulations on American firms operating in China. While large corporations may be able to adjust by shifting production to alternative regions, smaller US firms that rely on Chinese imports could face significant financial strain.

If the trade war deepens, the ultimate risk is that it could hurt both nations but ultimately favour China, as the US may be forced to seek a resolution on terms favourable to Beijing.

By Aghakazim Guliyev