Updated April 26th, 2024 at 09:08 IST

China brings new tariff law amid simmering tensions with US, EU

The law outlines a legal framework for tariffs on Chinese imports and exports, covering a range of topics, including tax incentives and counter-tariffs.

Reported by: Business Desk
China | Image:Shutterstock
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China new tariff law: China's legislature passed a new tariff law on Friday, signalling its readiness to retaliate against trade restrictions imposed by major partners like the United States and European Union. This move comes amid simmering tensions and concerns over China's industrial policies.

Law bolsters trade defense capabilities

The law, effective December 1, 2024, outlines a legal framework for tariffs on Chinese imports and exports. It covers a range of topics, from defining tax incentives to authorising counter-tariffs against countries breaching trade agreements.

Response to rising tensions

This legislation strengthens China's trade defense capabilities, a trend that began under President Xi Jinping in 2012. Previous measures empowered officials to counter trade restrictions impacting the flow of goods, data, and personnel.

Analysts believe heightened trade tensions with the US and EU prompted China to solidify its trade defense mechanisms. Professor Henry Gao of Singapore Management University compares the new law to a "nuclear weapon" - a deterrent rather than a weapon of first use. He acknowledges earlier provisions for retaliatory tariffs but suggests China aims to clearly establish its right to respond in kind.

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New trade front opens in Europe 

Growing concerns about a flood of cheap Chinese industrial goods in the EU are fuelling a new front in the West's trade war with China. The EU is considering tariffs on Chinese electric vehicles, while China investigates alleged dumping of EU brandy.

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(With Reuters inputs.)

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Published April 26th, 2024 at 09:08 IST