China is a production power plant- can it change tariffs?

US President Donald Trump struck China with the second tariff in so many months that means import from there Now face the penalty of at least 20%.

This is his last volley against Beijing, which is already facing steep tariffs in the United States, with 100% on Chinese electric vehicles up to 15% on clothing and shoes.

Trump’s tariffs are hit by the Chinese production center of Juggernaut – milling plants, assembly lines and supply chains that produce and send virtually everything from rapid fashion and toys to solar panels and electric cars.

Trading surplus in China with the world grew to a record $ 1tn (788 billion pounds) in 2024, at the back of strong exports ($ 3.5 tN), which exceeded its import account ($ 2.5 tN).

China has long become a world factory -it has flourished from cheap labor and state investment in infrastructure since it opened its economy for the world business in the late 1970s.

So, how much can Trump’s trading war hurt success in China?

Tariffs are taxes that are charged for goods imported from other countries.

Most tariffs are set as a percentage of the value of the goods, and this is usually the importer who pays them.

Thus, the tariff by 10% means that the product imported to the US from China worth $ 4 threatens at the expense of $ 0.40, which is applied to it.

Increasing the cost of imported goods is designed to encourage consumers to buy cheaper domestic products, which helps to increase its own economy.

Trump views them as a way of growing US economy, job protection and increase tax revenue. But the economic research of the tariff influences that Trump has imposed during his first term in office, suggest measures ultimately Increased prices for US consumers.

Trump said his latest tariffs are aimed at pressure in China to make more to stop the stream of opioid fentanyl to the US.

It also imposed 25% of the tariffs on the neighbors of America Mexico and Canada, saying that its leaders do not do enough to crack a cross -border drug trafficking.

Yes, analysts say.

Exports was the “rescue sophistication” of China’s economy, and when taxes are delayed, it exports to the United States a quarter to the third, said BBC Harry Murphy Cruz.

The most exports of China – which makes up a fifth of the country’s profit – means that a 20% tariff can weaken the demand from the border and reduce trade surplus.

“Tariffs will harm China,” said BBC Alicia Garci-Gerrer, Chief Economist of the Asia-Pacific in Natsis in Hong Kong. “They really need to do much more. They need to do what XI Jinping has already said – to increase domestic demand.”

This is a high task in the economy where The real estate market is lowered and The developed youth are fighting for finding high -paying work.

Chinese people don’t spend enough to replenish the economy – and in Beijing just announced by many stimulation measures to increase consumption.

While tariffs can slow down Chinese production, they cannot easily stop and replace it, analysts say.

“China is not only a great exporter, it is sometimes the only exporter like solar panels. If you want solar panels, you can only go to China,” said Ms Garci-Gerrero.

China began to turn from the manufacture of clothing and shoes to advanced technologies such as robotics and artificial intelligence (AI) long before Trump became president. And this gave China the advantage of the “early movement”, not to mention the scale of production in the second largest economy in the world.

Chinese factories can produce high -end technologies in large numbers, said Shuang Ding, Chinese economist Standard Chartered.

“It is very difficult to find a replacement … China’s status as a market leader is very difficult to overthrow.”

In China there is responded to the tariffs to the oncoming From 10-15% on American agricultural goods, coal, liquefied natural gas, pick-up and some sports cars.

And this is aimed at US companies in aviation, protection and export disabilities and announced an antitrust investigation against Google.

China also spent years, adapting to Trump’s first term. For example, some Chinese manufacturers have removed factories from the country. And the supply networks came to count more on Vietnam and Mexico, exporting from there to get around tariffs.

Nevertheless, the recent Trump tariffs in Mexico do not harm China because Vietnam is a big back corner for Chinese goods, said Ms Garci-Gerrero.

“Vietnam is the main thing here. If the tariffs are imposed on Vietnam, I think it will be very difficult,” she said.

Analysts concerning China more than tariffs are restrictions in the US.

These restrictions became the main point between the two countries, but they also fueled China’s determination to invest in home appliances that are independent of the West.

That’s why Chinese firm AI Deepseek shocked Silicone valley and nervous Washington when it released a chat -boot that rivals in Openai chat. The firm reportedly accumulated Nvidia chips before the US began to cut off China’s access to the most advanced.

Although it may “affect China’s competitiveness, I don’t think it will affect China’s status as production power,” Mr. Ding with Standard chartered said.

On the other hand, any ground income in China in technology production will increase its high cost.

This happened from the state support, the unmatched chain of supplies and cheap work, analysts say.

“The combination of globalization as well as business policies in China and market potential helped to attract the original wave of foreign investors,” said the BBC Chim Lee, analyst at the Economist Intelligence.

The government then doubled, investing in the construction of a wide network of roads and ports to attract raw materials and pick up the goods of Chinese production. What also helped was a stable exchange rate between Chinese Yuan and the US dollar.

Analysts point out that the transition in recent years to Advanced Tech has become convinced that it will still be relevant and outperform its competitors.

China already has a lot of economic acts from the production of a power plant. But there is also a political opportunity, because Trump tariffs strengthen America’s relations with the world.

“The door is ajar to make China as a fan of free trade and stable global power,” Mr. Moody’s said.

But it is not easy, given that Beijing was accused of overcoming international trade, such as Entry of the tariff is over 200% About imports of Australian wine in 2020.

Analysts say China should also look outside the US, which is still the main place for its export. China-third in size market, after Canada and Mexico.

Chinese trade with Europe, South -East Asia and Latin America is growing, but it is difficult to imagine that the two largest economies in the world can stop relying on each other.