US, China on brink of full-scale trade war

Analysts have cautioned that China and the US could be heading toward a full-scale trade war unless they manage to resolve their dispute before February 10.

Chinese tariffs on $14 billion worth of American goods are set to take effect, Caliber.Az reports per foreign media. 

Last week, US President Donald Trump announced a 10 per cent tariff on Chinese products, aimed at pressuring Beijing to take stronger action against fentanyl-related exports to the US and Mexico, and warned of further measures if China responds with retaliation.

Three days after the US tariffs were implemented, Beijing swiftly retaliated by imposing additional duties of 10 to 15 percent on US energy exports and agricultural machinery. These Chinese tariffs are set to take effect on February 10.

“This could be just the beginning of this phase of the trade war,” said Zhang Yanshen, an expert at the China Center for International Economic Exchanges. “This could become a very, very bad situation.”

Some analysts had anticipated that the US and China would engage in talks to prevent significant trade conflict. Initially, Trump mentioned he expected to have a conversation with President Xi Jinping, but after China's retaliation, he stated he was "in no rush" and described the tariffs as an "opening salvo," with "very substantial" actions yet to come.

When asked if the Trump administration was handling China in the same way it dealt with Canada and Mexico—who faced higher tariffs before receiving a one-month reprieve—a White House official clarified that the US was "in constant contact with our counterparts, both in Beijing and here in Washington."  

A spokesperson from the Chinese embassy in Washington stated that there had been “no new developments” since China revealed its retaliatory tariffs. Experts in Beijing suggested that Trump's aggressive tactics, intended to pressure Xi into quickly striking a deal, may have backfired.

The US president gave just two days between announcing and enforcing the tariffs, a timeline that was likely too short for Xi to accept. “China doesn’t want a deal like that,” said Ma Wei, a researcher at the Chinese government-affiliated CASS Institute of American Studies.

“You have to have equal talks and an equal agreement, not one in which you first put a high tariff on me, and then you say we have to make a deal.”

Ma compared the US tactics to a Chinese saying, "cheng xia zhi meng," meaning to deal with your adversary under pressure when they are at your doorstep. However, analysts pointed out that the relatively limited scope of China's retaliation, which involved antitrust probes into Google and Nvidia but targeted fewer goods than the US tariffs, indicated there might still be space for negotiations. 

Officials from the Trump administration emphasized that the US president's primary goal was for China to stop the flow of fentanyl, a deadly opioid that has become the leading cause of death among Americans aged 18 to 45. 

However, experts in Beijing suggested that talks might have stalled because Trump was also pushing for cooperation on other issues, such as exerting pressure on Russia regarding its invasion of Ukraine and forcing the sale of the short video platform TikTok to an American buyer. 

By Naila Huseynova