On Nov. 25, 2024, Donald J. Trump announced that he will be placing tariffs of up to 10% on Chinese goods for failing to stop the production of illegal fentanyl bound for the United States. In response, on Feb. 10, Beijing hit the U.S. with a 15% tax on certain types of coal and gas, as well as a 10% tariff on crude oil, agricultural machinery, and large-displacement cars and trucks. The imposition of these tariffs strains the already fragmented relationship that the U.S. and China have, creating a turbulent game of “chicken” between the two largest trading superpowers.
Julian Evans-Pritchard, head of China economics at financial insight firm Capital Economics, said in a research note Tuesday, “The measures are fairly modest, at least relative to U.S. moves, and have clearly been calibrated to try to send a message to the U.S. (and domestic audiences) without inflicting too much damage.” He suggests that the tariffs China imposed are a strategic move to send a message to the U.S. without causing damage or escalating the situation to the same extreme level as the U.S. tariffs.
However, weeks later, on Feb. 27, Trump announced an additional 10% on top of the already existing tariffs on Chinese imports. According to the White House, these tariffs will remain in place until illegal immigration and the flow of deadly fentanyl into the United States are addressed.
The back-and-forth tariff battle highlights the tensions between the U.S. and China. Both countries respond with economic measures, which further strain the relationship between them. Although Trump’s tariffs focus on pressuring China to resolve the fentanyl problem, they could lead to financial consequences for Americans. Higher import costs could result in higher-priced products and fuel inflation, causing disruption in the economy—raising the question of whether such aggressive measures will achieve their purpose or further strain the already fragile U.S.-China relationship.
With both countries constantly imposing tariffs and impeding each other’s economies, it is uncertain whether these policies and tariffs will lead to meaningful change or continue to scratch at an already deep wound. As the trade war keeps going, how far will either side go before one finally backs down?
