In a move that further exacerbates trade relations between the two global economic giants, an additional 10% tariff on all imported goods from China introduced by President Donald Trump has been officially imposed. This move is reportedly part of the US government's efforts to pressure China to be more assertive in tackling the drug trade—particularly fentanyl—which it says threatens the national security of the United States. Shortly after the US tariffs were imposed, the Chinese government announced that it would impose counter-tariffs of between 10% and 15% on imports of certain goods from the United States, such as crude oil, agricultural machinery, coal, and LNG. The retaliatory tariffs are scheduled to take effect on February 10, 2025.
Background and Policy Objectives
The US government emphasized that these tariffs were not intended to trigger a full-blown trade war, but rather as a leverage instrument to force China to follow up with stricter control measures on the circulation of drug precursor materials that are then misused by cartels. In a statement, the White House said that “access to the American market is a privilege” and that import tariffs are a “powerful leverage tool” to protect national interests.
China's Reaction and Counter Response
In response to the US tariff policy, the Chinese Ministry of Finance announced plans to impose counter tariffs. In its official statement, the Chinese government stated that a 15% tariff would be imposed on coal and LNG imports from the US, while a 10% tariff would be imposed on crude oil, agricultural machinery, and large-engine vehicles. In addition, China has also taken additional steps such as imposing export controls on several rare metals and opening antitrust investigations into major US technology companies, including Google.
Economic Implications and Potential Global Impact
Although the US government emphasizes that these tariffs are an effort to encourage domestic production and will not trigger a surge in inflation, economists warn that the tariff policy has the potential to increase production costs and consumer prices. With countries such as China, Canada, and Mexico accounting for a significant portion of US imports, this move could disrupt global supply chains and worsen the trade deficit. In fact, a number of analysts predict that further tariffs—even up to 60% on certain goods—could be imposed if no agreement is reached in upcoming negotiations.
The Superiority of Indonesian Manufacturing in the Context of Global Trade
Amid trade tensions between the United States and countries such as China, there is good news from Indonesia's manufacturing sector. For example, some factories such as Smart Vape Factory have reported that they can import and export to the US without being hampered by tariffs. This advantage is due to certain statuses or supportive trade policies, so that products produced in Indonesia can compete in the US market with more efficient costs. This is an added value for local producers, because in addition to gaining access to international markets, they are also able to optimize profits without the burden of additional tariffs.
Response from International Leaders
While the US government insists that the move is part of an effort to uphold national security, the international reaction is not uniform. Leaders from affected countries, including Canada and Mexico, have expressed readiness to renegotiate trade agreements and consider retaliatory measures if the tariffs have a negative impact on their economies. On the other hand, global observers are concerned that the escalation of tariffs could trigger a broader trade war, which would not only harm both parties but also impact the stability of the world economy.
Conclusion
The US' imposition of a 10% tariff on imported goods from China marks a new chapter in the trade conflict between the two countries. This move, which was responded to by a 10–15% retaliatory tariff from China, shows that tensions in US–China economic relations are far from over. Meanwhile, Indonesian producers, such as Smart Vape Factory, are able to export their products to the US market without being burdened by tariffs, indicating loopholes and opportunities amid challenging global trade dynamics. Although both sides are still open to dialogue and negotiation, the risk of further escalation remains, with the potential for significant negative impacts on consumers and the global economy.