US Vs China Trade War: Beijing Blacklists 18 US Firms, After Donald Trump's 125% Tariffs

Beijing: The ongoing trade tensions between the United States and China have taken an ugly turn, with China adding 18 US companies, including aerospace giant Sierra Nevada and multiple AI firms, to its "unreliable entity" list. China's move comes as a response to the US imposing 104% tariffs on Chinese goods, leading to fears of a deepening trade war. According to reports, the decision to blacklist these US companies is seen as a direct retaliation to the US tariffs, which were imposed by President Donald Trump as part of his "reciprocal" tariff policy. 

The United States move to impose a 104% tariff has been met with vast criticism from China, which has vowed to fight back against what it sees as "bullying" by the US. The Chinese Foreign Ministry has stated that the country will "never accept" such tactics and will take necessary measures to protect its interests.

The 18 US companies added to the unreliable entity list face business restrictions, sanctions, and fines in China. The development amidst rising trade tensions is considered as the latest escalation in the trade war between the two nations, with both sides digging in their heels. The US has imposed tariffs on dozens of countries, including massive 104% duties on Chinese goods, sparking fears of a global recession.

According to reports, China, added 18 US companies to its unreliable entities list, citing concerns over their involvement in arms sales and military cooperation with Taiwan. The companies, including Shield AI and Sierra Nevada Corporation, have allegedly compromised China's national sovereignty, security, and development interests. As a result, they will be banned from engaging in China-related import and export activities, as well as investing in the country. 

Earlier, China added six US firms to its "unreliable entities" list on Wednesday, followed by adding 12 to its export control list. The export control list prohibits the export of dual-use items, while the unreliable entities list allows Beijing to take punitive actions against foreign entities.

Fallout From Trump's Tariffs

The US tariffs have had far-reaching consequences, with global markets reeling from the news. The S&P 500 has suffered its deepest loss since its creation in the 1950s, and US Treasuries have extended heavy losses. European shares have also fallen, and US stock futures point to more pain ahead. The European Union has proposed retaliatory measures, including extra duties on US imports such as motorcycles, poultry, and clothing.

China has also taken steps to protect its economy, with the central bank asking major state-owned banks to reduce US dollar purchases and warning against sharp yuan declines. The Chinese currency has faced heavy downward pressure, with the offshore yuan at record lows.

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US Farmers and Trade War

The trade war has also had a massive impact on US farmers, who are bracing for the worst. In retaliation, China has imposed an 84% tariff on all American imports, which could lead to tens of billions of dollars in lost revenue for US farmers. The American Soybean Association has estimated that the tariffs could cost US farmers $5.9 billion annually. Other affected products include cotton, sorghum, beef, pork, and seafood.

USDA Secretary Brooke Rollins has framed the tariffs as part of a broader "new American economic strategy," emphasising their strategic value in reshoring US jobs and enhancing national security. However, the full economic consequences of the tariffs may not be evident until later in the year, particularly for row crop farmers currently in planting season.

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US-China Trade Relations

The trade war between the US and China shows no signs of abating, with both sides committed to their respective positions. The US has demanded that countries seeking exemptions or reductions offer reciprocal market access, investment commitments, or trade reforms. China, on the other hand, has vowed to fight back against what it sees as US “bullying”.

As the trade war escalates, businesses and investors are left to navigate the increasingly complex and uncertain landscape. The impact on global markets and economies will likely be massive, with many predicting a recession in the coming months.