New Delhi: China now faces tariffs of up to 245 per cent on import of goods into the United States “as a result of its retaliatory actions”, the White House said Tuesday afternoon (India time) as the trade war between the two countries appears to run further and further off road.

The announcement came as Donald Trump authorised an investigation into “national security risks posed by the US’ reliance on imported, processed critical minerals”, which includes cobalt, lithium, and nickel, and rare-earth metals used to manufacture batteries, such as those used in electric vehicles.

The order points out the US is “dependent on foreign sources… at risk of serious, sustained, and long-term supply chain shocks”, and this dependence “raises potential for risks to national security”.

Until now tit-for-tat tariff exchanges had seen the US levy a 145 per cent tax on Chinese imports and China slap a 125 per cent duty on American goods.

There is, however, some confusion about the tariff on China being ramped up by 100 per cent.

It appears – and the US has not confirmed this as yet – that the 245 per cent mentioned by the White House refers to the total amount of tax that can be levied on Chinese goods imported into the US.

China’s Response

On Wednesday morning a top Chinese official claimed the US’ tariffs were putting “pressure” on it.

However, simultaneously China also said its economy grew a forecast-beating 5.4 per cent in the first quarter. Industrial output climbed 6.5 per cent and retail sales 4.6 per cent year-on-year.

Beijing, though, warned the global economic environment is becoming more “complex and severe” and that more needs to be done to boost growth and consumption.

“If the US really wants to resolve the issue through dialogue and negotiation, it should stop blackmailing and talk to China on the basis of equality, respect and mutual benefit,” spokesman Lin Jian said.

‘Ball In China’s Court…’

Trump, meanwhile, has said China needs to make the first step in any negotiation. “The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them,” the President said, a day after he accused Beijing of reneging on a major Boeing deal.

Trump has repeatedly accused China, India, Brazil, and most of the rest of the world, in fact, of levying higher tariffs on American imports than the US places on goods it imports from them.

He has argued, and this was a major issue in his re-election campaign, that levying reciprocal tariffs will either force others to bring down their taxes or jumpstart a stuttering American manufacturing sector.

In line with that ‘vision’ that Trump, since the start of the year, has imposed duties on imports from China, alongside a 10 per cent ‘baseline’ tariff on many US trading partners.

For China specifically, he stacked a 20 per cent ‘fentanyl tax’, declaring Beijing had failed to control production and distribution of the deadly narcotic, and a 125 per cent charge for “unfair trade practices”.

By April 9 the cumulative tariffs had crossed 100 per cent, prompting markets worldwide, including in the US, to nosedive. Since then Trump has paused several orders, although these don’t impact China.

China responded in kind and also suspended import of sorghum, poultry, and bonemeal, put trade restrictions on 27 American firms, and filed a complaint with the World Trade Organization.

The WTO has said uncertainty over the US-China tariff war could have “severe negative consequences for the world”, and that world merchandise trade is set to fall 0.2 percent for 2025.

However, “severe downside risks… could lead to an even sharper decline of 1.5 percent”.

‘Elephant, Dragon Dance’

The tariff war has also prompted Beijing to reach out to India and the European Union to drum up support. Last month China’s Foreign Minister Wang Yi called on New Delhi and Beijing to “make elephant and dragon dance” and “take the lead in opposing hegemonism and power politics”.

China then called on the European Union to join hands to resist “unilateral bullying” by the US, echoing Xi Jinping’s remarks from earlier and stressing this would not only “safeguard legitimate rights and interests… but also safeguard international fairness and justice.”

Author Credits- Chandrashekar Srinivasan, NDTV WORLD