The measures that Donald Trump is taking are causing diverse consequences. The 25% tariffs for imports from Mexico and Canada that has just activated are a way to boost industry and employment in that country. Meanwhile, China is trying to take advantage of the moment to export more than ever, but there are many important elements in this commercial war.
China is watering the world of exports. The Asian giant has been promoting trade agreements with countries around the world for years. The country’s ministry of trade shows it in its List of free trade agreementswhich includes countries such as Australia, South Korea, Switzerland or Chile.
China already trades with almost everyone. There are agreements in negotiation with Norway, Israel or Panama, but new agreements with Colombia or Canada are also being investigated, precisely one of the great affected by the recent Trump tariffs. A well -known analyst, Balaji, He shared a graph in which the evolution of these agreements was appreciated from 2000 to 2024, when China has reached many more countries with its exports.
But China needs to export. The problem is that China produces much more than it consumes, and that exports much more than matters. It occurs with steel, with cars or solar panels, and as indicated In CNN That drives her to increase her exports to revive her economy. And when it exports, it makes it benefiting that thanks to this overproduction it can compete in prices, throwing from the market to local businesses that cannot compete in that field.
And consume much more. As we said, the imbalance between what is consumed and what is produced in China is remarkable. According to the World Bankin the world consumption represents 75% of the Gross Domestic Product (GDP), but in China it only reaches 53-54%. That is due to various factors, as indicated In Carnegie Endowmentbut promoting that domestic consumption is really complicated, which makes exports even more critical.
Care to import too much. If the countries that trade with China import too many merchandise and Chinese products, they are in danger of deindustrialized, as in fact it has happened in recent years in the West. We have delegated the production of technology to China, for example, and Trump’s measures are precisely aimed at recovering land in that market. The problem It also affects emerging economiesthat are flooded with Chinese products and without the ability to export their own.
Example: the electric car. Byd has managed to become the Great protagonist of the electric cars segment in 2024, and has done so thanks to that strategy. Their cars are usually more assertible and that has managed to attract a large number of buyers. Compete with the Chinese electric car has become very difficult, so Europe Tariff appealed months ago To try to balance things.
USA bet on the US. Trump’s measures are punishing imports And they are trying to get companies to manufacture there so that the country does not depend on those foreign products and materials. Recent ads Like those of TSMC either Apple They precisely try to avoid tariffs but force these companies to make strategic decisions that would probably not take.
China’s exports to the US import, but not so much. The majority of China’s exports focus on other regions, and not so much on the US. In 2022 those regions They added About three billion dollars, compared to 637,000 million dedicated to the US. The business with that country is remarkable, yes (22% of the total), but not critical for Chinese exports that can be affected by tariffs.
Canada (probably) will become more friend from China. The “punishment” tariff will affect trade between the US and countries such as Canada, but precisely this country has been increasing its trade quotas with China for years. Beijing has already shown his intention to reinforce those commercial ties with Canadaand Canadian prime minister, Justin Trudeau, made clear the situation. When referring to Trump, he highlighted how what he is doing is something “very dumb. Two friends fighting is exactly what our opponents worldwide want to see.”
Mexico also reacts. Claudia Sheinbaum, president in Mexico, also made it clear that “It is Mexico’s defense time“Faced with tariffs imposed by Trump. The president will reveal her plans soon, but she may also end up approaching the Chinese government as part of that response to Trump’s measures.
Being a friend of China has its. That provision of China to reach commercial agreements with more and more countries is not exempt from problems, and in fact we have seen it with the example of European tariffs to the Chinese electric car.
And meanwhile, collapse of the bags. Trump’s tariff policies have caused in recent days a collapse of the bags, and the great technological ones in the United States They have suffered especially that blow. Yesterday they managed to contain the losses a bit, but the falls have been significant in both traditional markets and in cryptodives.
Image | Cage Skidmore | Paul Kagame
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