Do Chinese And U.S. Tariffs Signal a New Trade War?

TaiwanPlus News

China has countered U.S. tariffs with retaliatory duties of its own. Does this signal the start of a big new trade war? Or are Beijing and Washington jockeying for position ahead of possible negotiations?

Transcript

00:00China has hit back against new U.S. tariffs on Chinese goods with its own duties on a

00:06range of American imports.

00:08Beijing says U.S. coal and liquefied natural gas will be subject to tariffs of 15 percent

00:14from February 10 while crude oil, farm equipment and some cars will be slapped with 10 percent

00:19import fees.

00:20They're in response to President Donald Trump's additional 10 percent tariffs on Chinese imports.

00:26Louise Watt has been following this story for us from our Taipei newsroom.

00:30Louise, is this the start of a new trade war?

00:33Well, Leslie, it could be, but I think we could see it more as each side making their

00:42opening move ahead of possible negotiations.

00:45Now, Trump has just come to power, but let's not forget during his campaign when he designated

00:52China an economic competitor, he pledged to put tariffs of 60 percent or more on China.

01:00Well, instead, his opening move is 10 percent.

01:04Those tariffs came into force today.

01:07Beijing reacted with its own tariffs on a range of U.S. goods, and it also took aim

01:14at some American companies.

01:16Google, for instance, now faces an antitrust investigation.

01:21But let's take a step back from the tariffs for a moment, because there are loads of points

01:25of contention between the U.S. and China.

01:29Now, the trade imbalance is in China's favour.

01:33But apart from that, there's the issue of fentanyl, which Donald Trump, he accuses China

01:38of not doing enough to stem the flow of that drug into the U.S.

01:43And for Beijing, the most critical issue in bilateral relations is U.S. arms sales to

01:48Taiwan.

01:49So there are these points of disagreement.

01:52But there are also areas where the U.S. and China could work together.

01:57Donald Trump has said that he wants to reach a trade deal with China, and he hopes to get

02:04Beijing's help in ending the war in Ukraine.

02:07And China's economic slowdown is going on.

02:11Beijing doesn't want to see a new round of a trade war going on.

02:16So that's why I say the two have made their opening moves.

02:20There's still a lot to play for.

02:22And Xi Jinping and Donald Trump are expected to have a phone call later this week.

02:27So on that phone call, or in the weeks and months ahead, perhaps they can negotiate a

02:33way to avoid a new big trade war.

02:40And Trump has threatened tariffs of up to 100% on computer chips imported from Taiwan.

02:46How is Taipei reacting to that?

02:50Well, Taiwan's foreign ministry today, without mentioning China, drew a very clear line between

02:59its relationship with the U.S. and Taiwan's own relationship.

03:05At a press conference, a foreign ministry spokeswoman said that Taiwan and the U.S.

03:10are partners with similar values and ideas, and stressed that Taiwan is a reliable partner

03:17of the U.S. and not a competitor.

03:21But of course, the idea of tariffs on semiconductors is worrying to Taiwan.

03:27But let's not forget that Taiwan makes most of the world's most advanced chips.

03:33And certainly, analysts here think that chip makers would pass on any additional costs

03:39to their American customers.

03:42And in turn, those costs would be borne by American consumers.

03:46So certainly, analysts here think that any tariffs on Taiwanese chips would backfire

03:55and have unintended consequences in the U.S.

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