A fresh round of US tariffs on wood, furniture and kitchen cabinets kicked in just as Washington and Beijing opened a tit-for-tat on port entry fees. The moves land atop earlier metal duties—50 percent on most steel and aluminium into the US—and signal that the world’s two largest economies are hardening trade positions, not easing them, the New York Times reported.
China tightens the tech choke points
Beijing has sharply curbed exports of rare earths and high-performance magnets, and is preparing new restrictions on battery-making equipment. These aren’t headline items to consumers, but they’re core inputs for semiconductors, smartphones, wind turbines and EVs. The impact lands fastest in Europe’s auto belt and among global electronics makers that rely on cross-border parts flows.
Collateral damage in Europe
The EU answered with its own steel protections, rolling out a 50 percent tariff aimed at Chinese overcapacity—and strengthening its hand with Washington. The bystander hit: British steel. With nearly 80 percent of UK steel exports headed to the EU, Brussels’ move darkens the outlook for mills that had just adjusted to US metal duties and thought a 25 percent edge into America offered breathing room.
Shipping, ports and the “shadow fleet”
Tariffs on Chinese-built ships apply to any carrier docking in US ports, raising costs well beyond China’s flag. Beijing responded by sanctioning US subsidiaries of South Korea’s Hanwha over alleged support for America’s shipbuilding actions. Meanwhile, Denmark is tightening inspections at Skagen to pressure Russia’s sanctions-evading “shadow fleet,” showing how trade frictions now bleed into maritime enforcement.
Allies pressed to choose
Washington and Beijing are leaning on third countries. After US lobbying, Mexico proposed a 50 percent tariff on Chinese cars, a sharp turn for one of Beijing’s biggest auto export markets. India, stung by new US tariffs of up to 50 percent on its goods amid disputes over Russian oil purchases, edged closer to China in high-profile forums—signalling it has options if Washington keeps ratcheting up pressure.
Markets hate the whipsaw
Stocks swooned after the latest volley, forcing the White House to soften tone without backing off. The IMF’s middling growth forecast understates the volatility businesses are living with: order books rewritten on Friday, compliance plans obsolete by Monday, and capital spending delayed because no one is sure what next quarter’s rulebook will say.
Protectionism goes viral
Canada, Brazil and Mexico have moved to shield their steel sectors, echoing Washington and Brussels. Even so, decoupling is limited: production networks remain deeply intertwined, and the centre of gravity keeps sliding toward Asia. For boardrooms, the message is not “reverse globalization,” but “engineer around the blast zone.”
What to watch next
Three tells matter now: whether US 100 percent tariffs on a broader China basket materialise; how far China goes on export controls for chip-adjacent gear; and whether Brussels and Washington can align defences without kneecapping their own manufacturers. Until those settle, companies will keep dual-sourcing, stockpiling critical inputs and pushing price increases downstream.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
