China to file lawsuit against latest tariffs

China will file a lawsuit with the World Trade Organization and take necessary countermeasures to safeguard its own rights and interests, the Ministry of Commerce said on Sunday after the United States announced it would impose a 10 percent additional tariff on goods from China.

The Ministry of Commerce said this move fails to solve the problems faced by the US, and undermines normal economic and trade cooperation between the two countries. An expert from a think tank in Beijing said the decision is expected to have a significant impact on US and Chinese industries.

"The unilateral imposition of tariffs by the US seriously violates the rules of the WTO. We urge the US to objectively and rationally view and handle its own fentanyl and other issues, rather than resorting to tariff threats against other countries," the ministry said in a statement.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said a higher tariff on Chinese goods will likely result in higher costs of importing products from China, and this cost may be further amplified along the supply chain.

"For US manufacturers, when they import intermediate materials or products from China, the costs of those products will increase, and the price increase will be transmitted along the layers of the supply chain. US consumers could face price inflation on certain products of over 10 percent," Zhou said.

He added that Chinese exporters could also face a significant challenge, as US importers may need to renegotiate with Chinese companies about specific prices and plans on additional costs.

The Foreign Ministry said in a statement on Sunday that China has expressed strong dissatisfaction and resolute opposition to the latest move, and will take necessary countermeasures to firmly safeguard its legitimate rights and interests.

There are no winners in trade disputes, and China's stance is consistent and firm.

The US has levied a 10 percent tariff on Chinese imports under the pretext of the fentanyl issue.

The Foreign Ministry said fentanyl is a problem of the US, and China has been among the countries with the strictest and most thoroughly enforced narcotics control policies in the world. In a humanitarian spirit, China has provided support to the US in dealing with its fentanyl problem.

"China urges the US to correct its wrong practices, maintain the hard-won progress of China-US drug control cooperation, and promote stable, healthy and sustainable development of China-US relations," the Foreign Ministry said in the statement.

The latest move comes after a year of robust foreign trade between US and China.

In December alone, US seaports handled an equivalent of 451,000 40-foot containers of goods from China, up 14.5 percent year-on-year, with some companies stockpiling goods early to get ahead of tariff threats, according to trade data supplier Descartes Systems Group.

Last year, US imports of machinery, bedding, plastic toys and other products from China rose 15 percent over the levels seen in 2023, data from Descartes showed.

Some US companies decided to import goods "earlier" than usual to avoid the tariff threats and potential strikes at ports, Jonathan Gold, president of supply chain and customs policy at the National Retail Federation, told China Daily.

Since 2018, the original round of tariffs imposed on China by the first Trump administration and those kept and extended by then President Joe Biden's administration, have caused a significant impact.

The Peterson Institute for Inter-national Economics in Washington, DC, found that in 2018, the two-way trade between China and the US was $659 billion. In 2024, the figure declined to $578 billion.

Thomas Fullerton, an economics professor at the University of Texas at El Paso, said a better way for the US to address the competition with countries in the Asia-Pacific region would have been "to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership", a free trade agreement between 12 countries.

"As trade barriers, tariffs can also cause domestic industries to become less competitive," Fullerton said.

According to the executive order, the US also imposed a 25 percent tariff on goods from Mexico and Canada. For energy products from Canada, the US imposed a 10 percent tariff.