Market Data 
Wang Xin, the head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 3,000 Amazon sellers, told Reuters on Thursday that Chinese companies that sell products on Amazon are considering hiking prices for the United States (US) or looking to find new markets due to a big blow from US President Donald Trump’s tariffs.
Key quotes
- Tariffs make it very hard to survive in the US market.
- Some sellers still proceeding to ship the goods to the US, others trying to find new markets.
- US tariffs will lead to ‘collapse’ of more small and medium-sized businesses, rapidly accelerate China’s unemployment rate.
- US tariffs are truly an ‘unprecedented blow’.
Market reaction
The Chinese proxy, the Australian Dollar (AUD), shrugs off these headlines as the AUD/USD pair advances 0.24% on the day to 0.6170 at the press time.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
