Will china reach the brink of ruin due to tariff?
Another push of about 1.9 trillion dollars by china to increase production in its country has created a stir in the global industry. America is now taking steps to protect its industries. US President donald trump on wednesday imposed a tariff of 125 percent on all goods imported from china and called it a necessary step to save American manufacturers from the flood of cheap goods from China. While trump increased the tariff on china from 104 percent to 125 percent, he gave a big relief by putting a 90-day break on tariffs on other countries of the world. President trump said that for 90 days, a tariff of only 10 percent will be imposed against those countries which started the talks impartially. But china was not given this exemption.
Strike shock to China
For the last four years, china has used about 2 trillion dollars of its domestic industry like real estate and housing funds in its industries. The result was that there was an unexpected flood of factories. After getting help from the country's government banks, Chinese manufacturers are rapidly expanding their scope and are preparing everything from electric cars to fertilizers with modernity according to the global market. US Trade Representative Katherine Tai, who was in the government of former President Joe Biden, said, 'It is a tsunami for everyone.' According to the data of the Central bank of china, additional financial assistance of about $ 2 trillion has been given to the industries. china is not facing an economic recession. China's leading electric vehicle manufacturer BYD is currently going to build two car factories.
There is going to be a big impact
China's exports increased by 13% in the year 2023 and a year later in 2024, it was increased by 17 percent. Exporters make up 20 percent of China's total GDP from this. On the contrary, the share of exports in the US GDP has fallen and reached around 11 percent. This is even less than the 13.6 percent of 2012. US exports to china fell by about 3 percent last year to only $144 billion. China's exports to the US have increased to $440 billion, meaning the trade deficit with china has increased to $295 billion. Other countries are also not keeping quiet against China. The european union has imposed a 45.3 percent tariff on electric vehicles. brazil has increased customs duty on China's metal and fiber optic cables. mexico and thailand are also considering a similar step. Other countries are also not keeping quiet against China. The european union has imposed a 45.3 percent tariff on electric vehicles. brazil has increased customs duty on China's metal and fiber optic cables. mexico and thailand are also considering a similar step.
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