China strengthens trade defence capabilities with new tariff law

China tariff law: China bolstered its trade defence capabilities with the passage of a new Tariff Law on Friday, aimed at fortifying its position amid escalating tensions with major trading partners like the United States and the European Union.

Approved by China's top legislature following extensive deliberations dating back to 2022, the Tariff Law underscores Beijing's readiness to retaliate against tariffs imposed by other countries on exports from the world's second-largest economy.

The legislation represents the latest addition to China's array of trade defence tools, signalling its resolve to respond firmly to any tariffs imposed by trading partners. It comes amidst an uneasy truce with Washington following a protracted trade war initiated during the presidency of Donald Trump.

Scheduled to take effect from December 1, the law delineates various legal provisions governing tariffs on Chinese imports and exports, including criteria for tax incentives and China's authority to retaliate against nations reneging on trade agreements.

Coinciding with US Secretary of State Antony Blinken's visit to China, the law's passage underscores Beijing's commitment to enhancing its trade defence capabilities amid ongoing contentious issues with the United States.

Under President Xi Jinping's leadership since 2012, China has intensified efforts to bolster its trade defence mechanisms, empowering officials to respond to trade disputes by regulating the flow of goods, data, and personnel.

The heightened tensions between Beijing, Washington, and Brussels have underscored the necessity for China to consolidate and enhance its existing measures to safeguard its interests, according to analysts.

The inclusion of the "principle of reciprocity" in Article 17 of the new law signifies China's resolve to respond in kind to preferential trade partners and impose equivalent tariffs on countries breaching trade agreements.

While experts suggest that the new law may not substantially impact China's trade dynamics, its enactment underscores Beijing's determination to uphold its trade interests amidst global uncertainties.

(With Reuters inputs)