Have Trump’s Tariff Threats Helped China Increase Its Exports? | News about Donald Trump

United States President Donald Trump said Tuesday that he is considering imposing 10 percent tariffs on imports from China, which could take effect as early as February 1.

It was Trump’s latest trade threat against China, the world’s second largest economy after the US and Washington’s biggest geopolitical rival. During the campaign that ultimately led to his re-election, Trump threatened to impose tariffs of up to 60 percent on Chinese goods, intensifying the ongoing trade war.

Yet if the proposed tariffs were intended to hurt Chinese exports, in an attempt to advance American interests in their trade relationship, Trump’s threats appear to have—at least so far—had the opposite effect.

Overall Chinese exports, including exports to the US, have increased in recent months.

So why is Trump threatening China with tariffs, how are Chinese exports still increasing, and what’s next in their trade spat?

Why does Trump threaten China with increasing tariffs?

On Tuesday, Trump alleged that China was behind the supply of fentanyl to America’s neighbors, which he said was responsible for the country’s deadly addiction crisis.

A day earlier, he said he was considering imposing 25 percent tariffs on Mexico and Canada, saying those countries were allowing “a lot of people” and fentanyl into the US. He also announced the creation of an “external revenue service” that would “collect our tariffs, duties and all revenues that come from foreign sources.”

As 2024 drew to a close, Chinese exports for US companies increased, up 4 percent between November 2023 and November 2024.

But more broadly, Trump has also accused China of unfair trade practices. China, the world’s largest exporter, has a huge trade advantage with the US. In the first 11 months of 2024, China’s exports to the US totaled about $401 billion, while China imported goods from the US worth approximately $131 billion.

Have Trump’s Tariff Threats Made a Difference?

It seems so – just not in the way the US might have wanted. As Trump’s inauguration approached and the threat of tariffs on Chinese imports grew, American companies stepped up purchases of Chinese goods to stock up before import costs skyrocketed.

In November 2024, China’s exports to the US were $47.3 billion, up from $43.8 billion in November 2023, according to the Observatory of Economic Complexity (OEC). That’s an increase of 8 percent.

Meanwhile, China’s imports from the U.S. fell 11.2 percent from $14 billion to $12.4 billion in November 2024 compared to November 2023. Simply put, amid Trump’s threats, the U.S. trade deficit with China increased.

Although the US government data is somewhat different from the OEC data, they indicate the same trend. Between July and November 2024, US imports from China reached about $203 billion, up 6.8 percent from $190 billion in the same five months in 2023.

Overall Chinese exports also rose. Last month, China’s total exports hit record levels, rising 10.7 percent in December from a year earlier, beating analysts’ estimates. Total exports for 2024 reached $3.58 trillion, up 5.9 percent from 2023.

China’s trade surplus will rise to a record $992 billion in 2024, a 21 percent increase from the previous year, customs reported on Monday.

And there could be more bad news for the US.

“While this inflow has temporarily boosted China’s trade surplus, the broader trade relationship has been undermined by US policy,” Carlos Lopes, Chatham House’s Africa Program fellow, told Al Jazeera.

“Escalating tariffs and continuing unilateral measures could deepen the erosion of confidence in the global trading system, further forcing China to diversify its partners and reduce its dependence on the US market,” Lopes, whose areas of expertise include international trade and China, said.

“The current spike may offer short-term gains for both economies, but it underscores the fragility of a system increasingly dominated by trade wars and unpredictability.”

What is Trump’s tariff war?

Trump has announced plans for tariffs on China, Canada and Mexico since taking office, but many other countries around the world are also preparing for similar measures.

He initially launched a tariff war against China during his first term, and by 2018 the US and China had imposed tariffs on each other.

While a truce in the US-China tariff war was announced in January 2020, Joe Biden ended up continuing Trump’s policies after winning the 2020 presidential election — despite criticizing during his election campaign.

In May 2024 The Biden administration reviewed Section 301 of the Trade Act and imposed higher tariffs of 25 to 100 percent on some Chinese imports. Electric vehicles and solar cells were among the affected products.

“The Biden administration’s imposition has placed restrictions on trade and technology with China that will be difficult for Trump to roll back,” Manoj Kewalramani, chair of the Indo-Pacific Research Program and fellow in China studies at India’s Takshashila Institution public policy center, told Al Jazeera.

China lost its position as the US’s top trading partner to Mexico in 2019, three years after Trump was elected president in 2016. As of November 2024, the US’s top trading partner was Mexico, with a total value of 69.1 a billion dollars to trade that month; Canada, with total trade of 61.8 billion dollars; and China, with a total trade of 50.5 billion dollars.

“Trump thinks that tariffs are important, not only from an economic point of view, but also from a negotiating point of view,” Kewalramani said, adding that there could be talks on tariffs similar to those around January 2020. But they may not take place immediately, he said. is.

“The timing of the introduction of tariffs is often subject to political maneuvers and administrative processes, and the lack of transparency in these decisions undermines the predictability of the trade system,” said Lopes.

“Unilateral actions by the US, without consultation with trading partners or adherence to multilateral norms, create uncertainty for companies and investors. This unpredictability not only disrupts supply chains, but also undermines confidence in the rules-based global trading order, which is already under strain.”

The tariffs are aimed at helping the US get out of a $1.9 trillion deficit. However, Lopes said, “Getting out of the deficit requires more than tariffs or protectionist measures; it requires strategic investments in technology, infrastructure and workforce development.”

What will US-China relations look like during Trump 2.0?

The USA and China are the largest economies in the world. US gross domestic product (GDP) in 2023 was $27.36 trillion, according to the World Bank, compared to China’s $17.79 trillion.

What will happen in terms of tariffs during Trump 2.0 is unpredictable. “We will have to wait and see if anything close to the 60 percent number is achieved,” Kewalramani said.

From the 26 executive orders Trump signed on the day of his inauguration, delaying the implementation of the ban on the popular short video app TikTok, which is owned by the Chinese company ByteDance, for 75 days. However, he has threatened to impose tariffs on China if it does not approve a potential US deal with TikTok, according to the Reuters news agency.

Trump invited Chinese President Xi Jinping to his inauguration, which was attended by his deputy Han Zheng. Kewalramani assumed that Trump and Xi would continue to work together, like Biden and Xi, despite all the restrictions on China by the Biden administration.

“China has already demonstrated resilience by diversifying trade partnerships and doubling down on domestic innovation. It is likely to expand its Belt and Road Initiative [BRI] and invest heavily in advanced sectors like green energy and technology to maintain its export competitiveness,” Lopes said.

The BRI is a network of highways, ports and railways that China is building. This global infrastructure should better connect Asia with Africa, Europe and Latin America.

“Importantly, China will benefit from the unilateral approach of the US, as it positions itself as a defender of multilateralism, creating new opportunities to fill the vacuum left by the US in a leading position in global trade. Rather than isolating China, US actions risk its further integration into alternative economic networks, weakening the very leverage the US wants to maintain.”

How will this affect consumers?

“I foresee an increase in tariffs, but maybe not as big as 60 percent,” Kewalramani said, adding that high tariffs would lead to a “significant explosion of costs for American consumers.”

According to the Congressional Budget Office (CBO), a nonpartisan federal agency, Trump’s tariff policies would fuel inflation and shrink the economy, but there are caveats.

The CBO’s December report on the effects of tariff increases projected a 1 percentage point rise in inflation by 2026, potentially costing American families an average of $1,560 a year, according to estimates by The Budget Lab, a nonpartisan policy think tank at Yale.