China announces new policy measures to protect its exports from Trump’s new tariff threat

PTI, Nov 21, 2024, 7:14 PM IST

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Gearing up to deal with the tough tariff increases by the incoming Trump administration in the US, China on Thursday announced new policy measures to back its export sector against “unreasonable foreign trade restrictions” and create a “good environment” for its exports.

US President-elect Donald Trump, who launched a trade war against China in his previous term by imposing a range of tariffs on Chinese exports, threatened to increase the duties by about 60 per cent, which could severely impact China’s exports, especially their profitability.

In a notice, China’s Commerce Ministry said the measures would help enterprises “actively respond to unreasonable foreign trade restrictions” and “create a good external environment for exports”.

The nine-point document, which enumerated measures intended to “promote the stable growth of foreign trade and consolidate and enhance the trend of positive economic recovery,” includes an expansion of export credit insurance coverage and more financing support for enterprises involved in international trade, the Hong Kong-based South China Morning Post reported.

The ministry also called for strengthening cross-border e-commerce, which it said has become a bright spot in the country’s economy.

The measures included expansion of exports including speciality agricultural products and other commodities, while supporting imports of crucial equipment and energy resources.

The ministry said the visa-free entry mechanism would be expanded in an “orderly manner” to further facilitate personnel exchanges.

Exports are the mainstay of the Chinese economy which is currently facing headwinds due to a range of problems, including sluggish domestic consumption and a bankrupt housing sector.

China’s exports to the US last year totalled USD 427.2 billion despite the tariffs against USD 147.8 billion in imports from America. China also imposed retaliatory tariffs against exports from the US.

Trump’s threat to further hike tariffs steeply raised serious concerns in Beijing which began efforts to protect its exporters.

Commenting on the measures, Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said the initiative was promising as global trade tensions were expected to heighten in the coming years.

“The recently introduced measures are not only a response to renewed US tariffs but also to growing tariffs and non-tariff barriers worldwide, which require Chinese exporters to enhance their ability to handle future trade disputes and investigations more proactively,” he told the Post.

An unnamed Beijing-based professor in public administration told the daily that while most of the measures were not new, they indicated the ministry was examining ways to mitigate the looming threat of a renewed or intensified trade war after Trump takes office in January.

“These measures, especially helping Chinese exporters fight trade barriers, can be key areas of work,” he said.