The Chinese government said it would be filing a formal complaint to the World Trade Organization (WTO) against the U.S. over President Donald Trump’s decision to impose new tarrifs on imports.
Trump on Saturday signed an executive order imposing new tariffs, including a 25% duty on all imports from Mexico and most products from Canada, along with a 10% tariff on goods imported from China.
According to the Trump administration, the tariffs are aimed at curbing the flow of drugs and undocumented immigrants into the US. However, the policy exposes American consumers to price hikes on a wide range of products, from avocados and sneakers to cars.
In swift response, Mexican President, Claudia Sheinbaum announced retaliatory tariffs, while Canadian Prime Minister, Justin Trudeau introduced “far-reaching” levies targeting American goods.
Also resounding, China’s Ministry of Commerce promised to file a claim with the WTO and take necessary countermeasures to safeguard its interests.
“The unilateral tariff hikes by the US seriously violate World Trade Organization rules,” the ministry said.
According to the Ministry, the move “not only fails to address America’s own issues” but also “disrupts normal China-US economic and trade cooperation”.
The Chinese government, however, failed to disclose measures it hopes to rake.
The tariffs imposed by the US, along with retaliatory measures from other countries, may trigger a trade war that could severely impact the economies of both the US and its targets, and could also potentially effects economies worldwide.
The latest development validates the fears expressed by the Director-General of World Trade Organization (WTO), Ngozi Okonjo-Iweala on January 23 at the World Economic Forum in Davos, Switzerland.
Okonjo-Iweala said Trump’s tariff threats could trigger retaliatory trade wars globally, warning that if allowed, it could have devastating effects on global economic growth.
“If we engage in tit-for-tat retaliation with tariffs of 25% or 60%, we risk plunging the global economy into a situation reminiscent of the 1930s, which led to severe double-digit GDP losses worldwide,” Okonjo-Iweala warned.
“The consequences would be catastrophic, and everyone will bear the cost. We’re very much saying to our members at the WTO, you have other avenues, even if a tariff is levied, please keep calm,” she added.
