On March 4, US President Donald Trump turned his trade war threats into reality by imposing sweeping 25 percent tariffs on products from Mexico and Canada, with the exception of Canadian energy imports, which faced relatively lower 10 percent tariffs.
He further escalated tariffs on Chinese goods, increasing them by an additional 10 percent on top of a recent hike of the same magnitude. With the 19.3 percent average tariffs already in place from his first term, the average US tariffs on affected Chinese goods have now surged to approximately 40 percent.
Trump’s actions contradict basic economic principles, violate World Trade Organization rules and disrupt international relations. History has repeatedly shown that trade wars do not revitalize economies but rather serve as catalysts for global economic crises.
The Great Depression provides a glaring precedent: when the US passed the highly protectionist Smoot-Hawley Tariff Act, it deepened global economic woes, reducing world trade by 66 percent and causing US imports and exports to collapse by 66 percent and 61 percent, respectively.
Now, Trump is repeating history, not only targeting China but also alienating US’ closest allies. His aggressive tariff strategy has been widely criticized, including by traditional US media outlets, which argue that these measures are detrimental to US interests, raising prices and fueling inflation. Experts predict that Trump’s tariffs could lead to a nearly $1,000 annual increase per household in the cost of goods.
Moreover, retaliatory measures taken by Mexico, Canada and China are expected to impact the US public, including those in the Midwestern agricultural states who were once staunch supporters of Trump.
While Trump’s trade war poses a significant challenge for China, it also presents a strategic opportunity. China’s top priority should be to abandon any illusions about US economic goodwill, respond with firm countermeasures and minimize dependence on US energy and agricultural products. In the long run, this circumstance could serve as an impetus for China to expand economic and trade cooperation with other nations. By strengthening ties with emerging markets, developing countries and even some of US’ traditional allies, China could spearhead a coalition against US economic isolationism.
The views are extracted from Mingshu Zatan (明叔杂谈) account and do not necessarily reflect those of facts.org.cn.
