Trump's New Tariffs Ignite Trade Tensions with China, WTO Warns of 'Catastrophic' Consequences
February 19, 2025
In a significant escalation of trade tensions, Trump has announced a sweeping 10 percent tariff on all Chinese imports, prompting China to retaliate with its own tariffs and file a dispute against the U.S. at the World Trade Organization (WTO).
WTO Director-General Ngozi Okonjo-Iweala has urged member nations to avoid retaliatory tariffs to prevent 'catastrophic' trade wars and emphasized the organization's role in managing trade conflicts.
Li Chenggang, a Chinese official, called for the U.S. to roll back tariffs and engage in multilateral dialogue based on equity and mutual benefit, highlighting the need for cooperation.
China's economy is currently facing challenges, including sluggish GDP growth and declining domestic consumer demand, exacerbated by a weakened real estate market.
The criteria for reducing the new tariffs remain unclear, with the latest 10 percent tariffs being significantly lower than the 60 percent initially suggested by Trump during his campaign.
Concerns have been raised about Trump's unpredictable trade policy, including threats of tariffs on Canada and Mexico, which could undermine U.S. credibility with global partners.
Despite the ongoing tariff exchanges, the current tensions between the U.S. and China seem manageable, allowing for potential future negotiations.
The global tech supply chain is experiencing shifts, with many companies reallocating manufacturing to countries outside China, such as India, Vietnam, and Thailand, to mitigate risks from the trade conflict.
Foreign entities held $8.6 trillion in U.S. Treasury securities as of late 2024, indicating a potential vulnerability for the U.S. if foreign governments decide to sell off these assets in response to ongoing trade conflicts.
A Chinese Foreign Ministry spokesperson stated that trade wars have no winners and urged the U.S. to stop politicizing trade issues, reflecting the growing frustration over the trade tensions.
China's intervention in the WTO is seen as an attempt to position itself as a defender of WTO rules, potentially strengthening its alliances in global trade negotiations.
Countries may seek to reduce reliance on the U.S. dollar by promoting alternative currencies for trade transactions, reflecting a shift in global economic dynamics.
Summary based on 14 sources
Get a daily email with more World News stories
Sources

The Washington Post • Feb 14, 2025
How the trade war could expand beyond tariffs
Al Jazeera • Feb 12, 2025
Will China and the US head into a full-blown trade war?
South China Morning Post • Feb 18, 2025
Opinion | How China’s trade war playbook could avoid Japan’s mistakes
South China Morning Post • Feb 18, 2025
China condemns Trump’s ‘tariff shocks’ at WTO, warns of global recession