Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, representing over 3,000 Amazon sellers, indicated that member companies are contemplating price increases for U.S. consumers or exploring alternative markets in response to tariffs imposed by the U.S. government. These tariffs are perceived as significantly impacting their viability in the U.S. market, potentially leading to business closures and increased unemployment in China.
The imposition of tariffs is considered an “unprecedented blow” to these businesses.
The Australian Dollar (AUD), often viewed as a proxy for Chinese economic activity, showed resilience, with the AUD/USD pair increasing by 0.24% to 0.6170.
A trade war is defined as an economic conflict arising from protectionist policies, characterized by escalating trade barriers like tariffs, leading to increased import costs and a higher cost of living. The U.S.-China trade war, initiated in 2018 by then-President Trump, involved the imposition of tariffs on Chinese goods, citing unfair trade practices and intellectual property theft. China retaliated with tariffs on U.S. products. A Phase One trade deal in January 2020 aimed to stabilize relations, but the COVID-19 pandemic shifted priorities. President Biden maintained existing tariffs and added new levies.
The potential return of Donald Trump to the presidency has raised concerns about a renewed trade war. Trump’s campaign pledge to impose 60% tariffs on China upon taking office on January 20, 2025, suggests a resumption of tit-for-tat policies. This could disrupt global supply chains, reduce investment, and contribute to inflationary pressures.
