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Aggressive US tariffs pressure China for a forceful response

Coolabah Capital says to date, the Trump administration has raised the US tariff on Chinese imports from about 22% to 76%. So, does this pressure China to make a strong retaliatory response?

Kieran Davies | Coolabah Capital

The US government’s decision to impose punitive tariffs on all its trading partners included a 34% tariff for China, in addition to the two 10% tariff hikes implemented last month.

This brings the cumulative increase in US tariffs on Chinese imports to 54%, close to the 60% increase promised by Trump during last year’s election campaign (note that the effective increase is higher for low-value imports from China because these will now be taxed rather than remaining duty-free).

Combining these three increases raises the total tariff rate on US imports of Chinese goods from an estimated pre-Trump level of 22% to around 76%.

There were also large US tariffs imposed on countries that had benefitted from attempts to relocate production out of China, such as Vietnam (a 46% tariff), Thailand (36%), and Cambodia (49%).

All this places pressure on China to make a strong retaliatory response, where to date it has made relatively minor changes to tariffs on select imports from US, restricted some US companies from operating in China, restricted the sale of rare commodities used in high-end manufacturing, and launched an antitrust investigation into Google. 

 

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All prices and analysis at 3 April 2025.  This document was originally published on Livewire Markets website on 3 April 2025. This information has been prepared by Coolabah Capital Investments (Retail) Pty Limited (CCIR) (ACN 153 555 867) which is an authorised representative (#000414337) of Coolabah Capital Institutional Investments Pty Ltd (CCII) (AFSL 482238). Both CCIR and CCII are wholly owned subsidiaries of Coolabah Capital Investments Pty Ltd. The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here. 


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