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Explained: Why China’s Economy Faces a Bigger Threat from Trump’s New 60% Tariff Plans This Time Around

Updated: Nov 7, 2024


Photo by Reuters

Summary


  • China's property market crisis and high debt levels have weakened its economic foundations.

  • Consumer spending remains low, while deflationary pressures threaten growth.

  • Limited currency flexibility restricts China’s ability to offset the impact of high tariffs.

 

 

The Tariff Threat Returns


In a surprising twist, former U.S. President Donald Trump’s re-election brings renewed threats to impose tariffs as high as 60% on Chinese imports, reigniting a trade war at a crucial time for the Chinese economy. Unlike the previous rounds of tariffs under Trump’s administration, which ranged from 7.5% to 25%, the stakes are significantly higher now. China's economic landscape has changed considerably, with vulnerabilities that could intensify the impact of these new tariffs. Here’s a look at the factors making China’s economy more vulnerable to this potential tariff shock.

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