Why the US-China Tariff War is Losing Its Economic Justification

The escalating tariff conflict between the US and China has raised concerns about economic viability and global trade stability. A Chinese spokesperson criticized the US's 245% tariffs, stating they no longer make economic sense. As both nations engage in retaliatory measures, including bans on key exports, the Asia-Pacific region faces pressure to navigate the fallout. With the potential for significant geopolitical repercussions, the need for new trade agreements and regional cooperation is becoming increasingly urgent. This article delves into the complexities of the trade war and its implications for both economies.

By Narendra Chaudhary Apr 17, 2025, 13:17 IST

China Responds to US Tariffs

Beijing: A spokesperson from China's foreign ministry stated on Thursday that the hefty 245% tariff imposed by the United States on select Chinese goods is no longer economically viable.

The spokesperson, as reported by Xinhua, indicated that if the US persists in its 'tariff numbers game', it will disregard these tariffs.

This remark follows the White House's announcement that China is subject to tariffs as high as 245% due to its retaliatory measures.

The White House Fact Sheet confirmed that these tariffs are a direct result of China's counteractions.

In retaliation, Beijing has instructed its airlines to halt any further deliveries of Boeing aircraft, following the US's earlier decision to impose a 145% tariff on Chinese imports.

The US President has expressed a willingness to negotiate a trade agreement with China, but insists that Beijing must initiate the process.

The White House noted that over 75 countries have reached out to discuss new trade agreements, leading to a pause in the individualized higher tariffs, except for China, which retaliated.

Additionally, the White House accused China of restricting exports of critical high-tech materials like gallium, germanium, and antimony to the US, which have potential military applications.

A recent report from S&P Global Ratings highlighted that there are no victors in a trade dispute, warning that the ongoing conflict between the US and China could lead to significant economic and geopolitical repercussions.

The Asia-Pacific region, which relies heavily on exports to both the US and China for its economic growth, may find itself in a precarious position, needing to choose sides or maintain a careful balance between the two economic giants.

In response to the tariffs, governments in the Asia-Pacific are considering forming regional trade blocs or bilateral agreements, which could hasten the relocation of supply chains and production.

China's economic growth faces increasing risks as trade tensions with the US escalate, leading to a decline in exports due to weaker global demand. Furthermore, the domestic economy is struggling, primarily due to an ongoing real estate crisis that is undermining consumer confidence.