Tension between the two countries increased after America imposed tariffs on Chinese products.

Washington: In a strategic move with significant impact on global trade factors, the Biden administration announced its intention to impose new tariffs on various Chinese products. These Chinese products include EVs, solar batteries, advanced batteries, steel, aluminum and medical equipment. The announcement, made amid intense competition between President Biden and his predecessor Donald Trump, highlights the growing conflict between the world's two largest economic powers.

The tariffs, to be imposed over the next three years, are intended to address concerns about unfair trade practices and protect domestic industries. Despite assurances from administration officials that the tariffs will not increase inflation, potential retaliatory measures from Beijing are likely to escalate tensions with China.

The US's biggest concern is low-cost Chinese EVs that are taking over the US market due to government subsidies. Tariffs would reduce such imports and protect American workers and industries. The US administration views such tariffs as crucial to countering Beijing's efforts to dominate emerging technology markets. He described this step as important for national security and economic stability.

The decision to impose tariffs is believed to be derived from a comprehensive review of trade relations with China. This step empowers the government to effectively deal with unfair trade practices. However, critics say the tariffs, while significant, will have limited impact and affect only a few Chinese products.

On the other hand, the Chinese government immediately criticized the US move, calling it against international trade norms. China clarified that the growth in its business in EVs and solar cells was not due to subsidies but due to new research.

The Chinese President has decided to increase the production of EVs and other goods to boost exports as China's economy has slowed down due to the real estate market downturn and the first Covid. At such a time, this step of America may cause China to miscalculate.