Trump’s steep new tariffs on China risk flooding global markets with unsold goods

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US President Donald Trump’s latest tariff salvo—an average 70% duty on Chinese imports—threatens to create a massive oversupply of goods globally as $400 billion worth of China-made products look for new markets. While Trump’s tariffs are intended to punish what he calls unfair trade practices, economists warn they could trigger a new wave of global “China shock” as displaced exports upend supply chains and stress already strained economies, the Wall Street Journal reported.

Domino effects and inflation risks at home Beginning April 9, a wide range of Chinese goods—including electronics, toys, footwear, steel, and essential manufacturing parts—will become significantly more expensive in the US. Consumers and businesses alike will bear the brunt. At the same time, countries like Vietnam, Japan, and South Korea may also suffer as Chinese exports shift toward new markets, squeezing out regional competitors and igniting more retaliatory measures.

Global retaliation and the limits of market absorption The ripple effect is already visible. From Brazil to the UK, nations are raising trade defences in response to China’s mounting export surplus, which surged due to President Xi Jinping’s investment in manufacturing amid weak domestic demand. Nearly 500 antidumping rulings have been launched against China since Trump’s original trade war began in 2018, and now with this latest escalation, there are growing fears of a protectionist spiral.

No easy alternatives for US manufacturers Despite the tariff wall, US businesses remain dependent on Chinese imports. In 2024, China supplied a fifth of the US’s imported steel, a third of footwear, and three-quarters of toys. Finding alternative suppliers or reshoring production will take time—and may not be possible for critical components and materials.

Global economy under pressure The latest tariffs come just as global demand struggles to rebound. With China’s own consumers reluctant to spend and the property market in turmoil, economists argue Beijing must ramp up stimulus—through interest rate cuts, government borrowing, and consumer confidence efforts—to absorb some of the blow and reduce its dependence on exports.

China vows retaliation In response, Beijing has promised “resolute” countermeasures, though it has not yet outlined details. In past disputes, China targeted US agricultural products and added firms to export blacklists. Officials argue tariffs hurt the US as much as its trading partners and undermine global economic recovery.

Tariffs beyond China Trump’s tariff escalation wasn’t limited to Beijing. Other major US trading partners—including Japan, South Korea, Vietnam, and even the EU—were slapped with new duties. Countries not directly named in Trump’s “reciprocal” list were hit with a flat 10% tariff on all imports, effective April 5, signalling a broad protectionist shift.

Warning signs ahead “The real fireworks are yet to come,” said Michael Pettis of Peking University. With global economies already stressed and trade wars heating up, Trump’s aggressive new tariff strategy may not only strain US consumer prices but also destabilize a fragile global recovery.