China’s Response to Trump’s Tariffs Tantrum

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I wrote this one together with my colleague Tan Chia How of the East Asian Institute. Hope you enjoy it,Thanks for reading Bert’s Newsletter! Subscribe for free to receive new posts and support my work.Trump’s Tariff TantrumFor United States president Trump “Tariff is the most beautiful word in the dictionary”[1].It came as no surprise, therefore, that he used tariffs on the earliest occasion. The surprise was that he used it first against some of his closest trading partners in USMCA, Canada and Mexico, as well as against China. Moreover, the stated reason for using tariffs was border security, not trade.On the 1st of February, 2025 the Trump administration declared a national emergency under the International Emergency Economic Powers Act (IEEPA). This, Trump used as the legal basis for to issuing executive orders imposing trade tariffs on Canada, Mexico and China. These measures purport to hold these countries “accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country (the US)”[2]. However, the underlying reason seems to be trade. President Trump appears to view any country that runs a trade surplus with the US as working against his “America First” agenda, (mis)characterising US bilateral trade deficits with its trading partners as a “subsidy” from the US. Irrespective of this flawed premise, the impact of the tariffs can be real.The Trump administration announced a 25 percent import tariff on goods from Mexico and Canada, with the exception of energy export from Canada, on which a 10 perce…