Summary
China has shrugged off the latest U.S. tariff hike, dismissing the Trump administration’s threats as a “meaningless tariff numbers game.”
Donald Trump’s move to impose tariffs “wiped trillions of dollars off Wall Street” and raised duties on foreign goods, claiming to bring back U.S. manufacturing jobs.
A White House fact sheet announced tariffs on some Chinese imports would rise to 245%.
China’s Commerce Ministry said the move “fully exposes the fact that the United States has become irrational” and vowed to see the trade war “through to the very end.”
There is functionally no difference between a 145% and a 245% tariff.
The cost of going through a black market rather than a clear or grey one is likely already below 145% and the grey one is likely to fill most gaps in the long run anyways.
Grey market tariff skirting might be Canadian or UK companies slapping their logos and “made in X” marker after making a tiny change to the product. The barrier to entry on this is quite low as is the risk. If your profit is capped at 145% you still have a lot of room to make money.
Generally any tariff over 50% eats into profit margins sufficiently to end trade altogether.
Any escalation in tariffs above that is essentially just a symbolic dick measuring contest. China is being the adult in this situation by not engaging.