China's Countermeasures: A Looming Storm for US Consumers and Economy

As the US-China trade war escalates, China has vowed to take countermeasures against the US's latest tariff hike, which is linked to the fentanyl issue. The US plans to impose an additional 10 percent tariff on Chinese imports starting Tuesday, March 4, on top of the 10 percent tariff introduced last month. This move has drawn strong criticism from China, which maintains that it has taken significant steps to combat the fentanyl crisis and that the US's actions are counterproductive.



China's response to the US tariffs is likely to include both tariffs and non-tariff measures, with U.S. agricultural and food products most likely to be targeted. This could lead to a reduction in Chinese imports of U.S. agricultural goods, resulting in falling revenues for U.S. farmers and affecting the broader agricultural economy. Additionally, non-tariff measures could include restrictions on U.S. investments in China or limits on U.S. companies operating in China, which could disrupt U.S. businesses and supply chains, potentially leading to higher prices for consumers and a slowdown in economic growth.



The US's decision to impose additional tariffs on China will also have significant impacts on the global supply chain, particularly in the context of the ongoing COVID-19 pandemic. The tariffs will disrupt the stability of global industrial supply chains, leading to increased production costs, reduced efficiency, and potential shortages of goods. Higher tariffs will increase the cost of imported goods, which will be passed on to consumers in the form of higher prices. According to a study by the Federal Reserve Bank of Atlanta, the additional tariffs are projected to increase the prices of everyday retail goods by roughly 0.8 percent to 1.6 percent.

Moreover, the US's decision to impose additional tariffs on China will have long-term implications for the global economy, with other countries likely to be affected in various ways. The trade war has led to disruptions in global supply chains, increased inflation, and potential job losses in affected countries. For instance, apple has considered moving some of its production out of China due to the trade tensions. The Peterson Institute for International Economics estimated that the 25 percent tariffs on most imports from Mexico and Canada, combined with the additional tariffs on Chinese goods, will cost the typical US household more than $1,200 a year in higher prices. The International Monetary Fund (IMF) has warned that the trade tensions could lead to a significant reduction in global GDP, with the potential for a global recession if the situation worsens.

In conclusion, China's countermeasures against the US tariffs linked to fentanyl are likely to have significant impacts on the US economy and consumers, as well as the global supply chain and the broader global economy. The US's decision to impose additional tariffs on China will exacerbate the ongoing trade war, leading to increased inflation, higher prices for consumers, and potential job losses in affected countries. The long-term implications of the US-China trade war are severe, and other countries may face disruptions in supply chains, increased inflation, and potential job losses. The global economy could experience a slowdown or even a recession if the situation worsens. It is crucial for the US and China to engage in constructive dialogue and find a resolution to the trade war to mitigate these potential consequences.