Trump's high tariffs: Is there a risk of a new trade war with China?

Amid growing tensions between the US and China, US President Donald Trump plans to impose high tariffs on Chinese imports. This could have far-reaching economic consequences for both countries. According to a report by the IPG Journals The tariffs, which could be between 20 and 60 percent, are less worrisome for China, while Beijing's main concern is decoupling from the dollar-dominated international monetary system.

China is considering converting the BRICS group into an alternative currency system and is currently trying to develop various payment systems. Chinese engineers are making advances in microphone production, boosted by the new Cold War, which is also putting pressure on European companies to shift their investments to the United States.

The trade conflict and its effects

Loud dw.com Trump announced that he would impose tariffs on all imported goods to increase domestic production and jobs. Critics warn that these tariffs will result in higher prices for U.S. consumers, particularly low-income earners, while they could threaten the competitiveness of American manufacturers. The US trade deficit with China was already $270.4 billion in the first eleven months of 2024.

Trump is under pressure to encourage manufacturers to move production back to the United States and has already threatened to impose 25 percent tariffs on goods from Canada and Mexico after criticizing the USMCA agreement. In response to its tariffs, China also plans to impose temporary tariffs on imports of industrial plastics from the United States.

Additionally, Trump expressed concern about the BRICS nations and their discussions about a new currency, threatening 100 percent tariffs if they challenge the dollar's dominance. So global economic relations are at a critical juncture as Trump plans to travel to Beijing to negotiate with President Xi Jinping in his first 100 days.