China’s economy is less reliant on exports than it once was, and could boost trade with other countries, experts say
The United States has thrown what it hopes will be the punch that forces its main economic rival, China, to change its trade practices. On Friday, US President Donald Trump more than doubled import tariffs on hundreds of billions of dollars’ worth of Chinese goods.
But like a seasoned boxer, China is now in a position to withstand such a beating, and has a range of options to hit back, analysts say.
It can use its enormous population and other export markets as alternatives to US demand to cushion the impact of the new levies.
Shortly after Trump raised import tariffs on $200bn worth of Chinese goods to 25 percent from 10 percent, China’s Ministry of Commerce promised to take “necessary countermeasures”, without giving details.
Trump has also threatened to impose additional tariffs on another $325bn of Chinese goods, covering almost everything China exports to the US.
The additional tariffs kicked in while a Chinese delegation led by Vice Premier Liu He was in Washington, DC for an 11th round of negotiations.
Stock markets fell sharply in the days after Trump promised in a May 5 tweet to raise tariff rates in the latest round of the nearly two-year-long trade war, despite the markets regaining some ground on Friday.
But analysts say the long-term economic impact on China’s economy is difficult to quantify and may be less severe than the market reaction would suggest.
