The trade war between China is coming, India is eyeing China's steel, is another trade war about to start? The maximum tariff on China is 200%, Indonesia is even more ruthless than Biden, why is it said that it is unloading the mill and killing the donkey? In the face of the overwhelming "overcapacity theory", how should China take over?
The trade war between China and Europe is imminent, and India is also joining in the fun
In the past few days, a series of negotiations and sanctions between China and the EU around the anti-subsidy tariffs on electric vehicles have attracted a lot of attention from the global media, especially after China announced rounds of counter-investment, which made the whole of Europe feel the tense atmosphere, especially Germany, as a major car manufacturer. So in a very short period of time, two senior German politicians visited China to try to reach a deal with China.
Even German Chancellor Olaf Scholz expressed his hope that the EU could put the range of tariffs on electric vehicles at about 15% to achieve the principle of reciprocity with China, and both sides took a step back on this issue.
But at the same time, with less than a week left before the EU implements tariffs on electric vehicles on July 4, the EU has only made a small reduction in tariffs, with the largest reduction being only 0.5%, and a trade war between China and the EU seems inevitable.
However, it is surprising that India, which claims to be the sole hegemon of the South Asian subcontinent, has recently reported tariffs on Chinese products.
According to a report by the British news agency Reuters, negotiations are underway within the Indian government to deal with a significant increase in Chinese steel imports. As of March this year, China has exported a total of 2.7 million tons of steel products to India, making it India's largest source of steel imports.
These data have also made India's domestic steel companies feel generally panicked, and they have asked the Indian Ministry of Steel to raise the current 7.5% steel import tax to 12.5% to cope with this new import wave.
From the outset, India's steel ministry has shrugged off the proposals of these companies, emphasizing that the huge imports mean that there is no need to worry about the strong domestic demand in the domestic market.
But as time passed, the matter was stabbed to the Indian Ministry of Trade, and the two sides had to start intensive negotiations, although the final outcome is not yet known, but if India decides to impose import tariffs on Chinese steel, it will inevitably attract strong countermeasures from the Chinese side.
And from a practical point of view, 2.7 million tons of steel products from the numbers seem to be a lot, but in fact only account for about 2% of India's total steel production capacity, even if the return to the previous 12.5% tariff, it is difficult to have a fatal impact on China's steel industry, but China's countermeasures are very likely to make India face huge losses, completely self-inflicted.
Indonesia is even more ruthless than Biden, imposing 200% tariffs on Chinese products
Coincidentally, in addition to India's preparations for a new round of tariffs on Chinese products, there is another unexpected country that has fully embraced the Western narrative and launched an all-out attack on goods from China: Indonesia.
Although Indonesia's presence is not high in a series of international hot issues, Indonesia can be regarded as a powerful party in terms of land area.
According to a report by Indonesia's state news agency Antara, the Indonesian government is working on a new regulation to protect local industries from the "influx of Chinese products" and impose import taxes of up to 200 percent on footwear, clothing, textiles, cosmetics and ceramics from China. Judging from the data alone, this tariff policy is more severe than US President Joe Biden's previous 100% tariffs, and it is also significantly more than the 60% tariffs on China advocated by Trump.
Indonesia's trade minister recently announced that the United States can impose 200% tariffs on imported ceramics and garment products, which shows that Indonesia can do the same to protect Indonesia's small and medium-sized enterprises and industries to "survive".
Therefore, Indonesia will adopt a tariff policy on Chinese goods, which will take effect immediately once it is made public.
The report further mentioned that the main reason why the Indonesian government is so anxious is that Indonesia has shown a skyrocketing trend in the import of clothing and other accessories, and the import volume in January this year was still 12.26 million US dollars, and after March this year, this figure soared to 23.98 million US dollars, which is almost equivalent to an increase of 100%.
Purely from the level of data, the growth of this data shows abnormal signs, but it is not an excuse for Indonesia to specifically target Chinese goods for tariff countermeasures, because trade behavior is two-way, especially international trade, if it is not for Indonesia's own huge internal market, and Indonesia's own enterprises can not meet this demand, it is definitely difficult for Chinese goods to pour into the local area on a large scale in a short period of time.
In other words, even if this money is not earned by Chinese companies, Indonesia's local industry "can't catch it". Moreover, from a higher level, the reason why Indonesia's internal consumer market has been able to develop rapidly is inseparable from the cooperation between ASEAN and China.
The "overcapacity theory" is prevalent, and China needs to be vigilant
On the other hand, whether it is India's rhetoric on steel imports or Indonesia's explanation of imports of Chinese goods, we will find that it is essentially a variant of the "Chinese overcapacity theory", which alludes to China's dumping policy against these countries, so they "have to take measures" to counteract.
The so-called "theory of excess" happened to be a kind of rhetoric concocted by the United States specifically aimed at China, which was first put forward by US Treasury Secretary Janet Yellen, who visited China.
Its real purpose is to create a new "international consensus", so that countries in the world that have frequent trade with China will begin to be vigilant about trade with China, and even set up trade barriers for Chinese products, so as to hit China's foreign trade exports, indirectly promote the "implosion" of China's huge industrial system, and buy a window of time for the industrial revitalization strategy of the Western world.
In other words, the so-called "overcapacity" is a "conspiracy" set up by Western countries specifically against China, but now it has become an excuse for some countries to specifically target Chinese products, and in a way, their goal has been achieved.
On the one hand, the Chinese government should expand domestic consumption and domestic demand through various preferential policies to avoid a potential export crisis, and on the other hand, China should also strengthen cooperation with other developing countries to open up new third world markets as a replacement for China's commodity exports.