On Thursday afternoon (February 13) Eastern Time, US President Trump held a press conference on reciprocal tariffs (mutually beneficial tariffs) at the White House. The impact of US reciprocal tariffs on various countries, especially on China, has drawn attention. Experts analyzed that reciprocal tariffs will have significant medium to long-term effects on Chinese exports.
During the press conference, Trump presented a blueprint showing the imposition of reciprocal tariffs on each country importing products into the United States. In the Oval Office, Trump told reporters, “We want a fair competition environment.”
White House officials stated in a conference call that these tariffs may be implemented within a few weeks. Nominee for Secretary of Commerce, Howard Lutnick, mentioned that the government will address the issues of each affected country one by one, with research on the matter expected to be completed before April 1.
Currently, the average tariff rates of most developed countries are similar to those of the United States. Industry insiders estimate that products from countries like China, Vietnam, Brazil, and India will be most affected by reciprocal tariffs. Among them, China has the highest average weighted trade tariff rate.
Following the first US-China trade war that began in 2018, China imposed tariff rates on American goods as high as 21.1%. According to US Department of Commerce data, the US trade deficit in 2024 increased by 17% compared to the previous year, nearing $1 trillion. China’s General Administration of Customs statistics show that China’s global trade surplus last year was close to $1 trillion, with a trade surplus with the US reaching $360 billion.
US economist David Huang told Epoch Times that China (referring to mainland China) would be the most affected country. Firstly, since China joined the WTO in 2001, it promised to reduce tariffs to equality, but failed to fully comply, only slightly reducing them. It also raised prices of imported goods through consumption taxes and value-added taxes, not strictly adhering to WTO commitments and related documents signed at the time, thereby increasing trade barriers. Now, with the US implementing reciprocal tariffs, Chinese goods are bound to lose much competitiveness.
Secondly, due to China’s high export dependence, the US accounts for nearly 30% of global consumption capacity, while Europe accounts for 25%. If the EU joins in the imposition of reciprocal tariffs, the impact on Chinese exports would be immense.
Thirdly, as China provides over 20% of global products, mainly exported to the US, in the short term, China may struggle to maintain its foreign exchange surplus and trade surplus, leading to foreign capital withdrawals, order relocations, and shifts in industrial chains, all of which would have medium to long-term impacts on the Chinese economy. Once industries relocate, they are unlikely to return to China in the short term, dealing a severe blow to the Chinese economy. While China may maintain significant exports to Asia, Africa, and Latin America, the quantity and quality of exports to these countries cannot compare with those to the US and EU.
Fourthly, a significant portion of Chinese goods labeled as exports actually pass through countries like Vietnam, Mexico, and Brazil before reaching the US. Following the implementation of reciprocal tariffs by the US, there will be more scrutiny disallowing any country from exporting goods to the US through a third-party, which would significantly impact China’s overall trade surplus in the medium to long term.
Fifthly, regarding technology restrictions, transfers, and transactions. With the US updating tariff policies and amidst trade tensions with China, the US will impose more restrictions on exporting technology to China, leading to a reduction in China’s high-tech, high value-added, and high-capacity product exports in the future. Coupled with foreign capital withdrawals, typically representing high technological content in China, if companies like Apple Inc. relocate their production capacity outside of China, China’s future exports of high value-added products would see a substantial decrease, posing a serious blow to China’s export profits.
The fairness of the Trump administration’s implementation of reciprocal tariffs has also garnered attention.
Huang pointed out that from the standpoint of the US federal government and its citizens, the introduction of reciprocal tariffs aligns with fairness principles, as it aims to balance global trade rules evenly, which is legally and morally justifiable. “The policy of reciprocal tariffs fundamentally adheres to economic principles and current economic realities, serving as a key measure to address trade inequality issues.”
He stated that implementing reciprocal tariffs not only serves to protect domestic businesses but also enhances negotiation leverage with other countries. However, there are disadvantages, such as higher prices of imported goods, potential increase in consumer costs, and the possibility of retaliatory reciprocal tariffs on US exports, weakening international market competitiveness.
He emphasized that as past trade practices have been unequal, correcting them will increase global trade friction. Nevertheless, this temporary pain is a necessary step for long-term benefits for all parties involved. However, some vested interest groups may argue that trade frictions hinder global integration progress under the pretext of so-called obstacles.
Huang also cautioned that while this policy may benefit domestic industries in the short term and promote fairness, continuous scrutiny is essential to ensure genuine fairness in the medium to long term. For example, in the past, China marginally reduced tariffs but increased consumption and value-added taxes, indirectly raising the prices of imported goods and suppressing their purchasing power domestically.