China Passes Law Allowing Retaliatory Tariffs
China's top legislature has passed a new Tariff Law, giving the country the legal framework to retaliate against trade partners who impose tariffs on Chinese exports. This move comes amidst rising tensions with the United States and the European Union, who have both expressed concerns about China's industrial overcapacity.
The law, which takes effect on December 1st, outlines a range of legal provisions related to tariffs on Chinese imports and exports. This includes provisions on what constitutes tax incentives and China's right to retaliate against countries that violate trade agreements.
The passage of this law reflects China's efforts to strengthen its trade defense capabilities, particularly in the face of growing international scrutiny. The law is seen as a deterrent against countries that might consider imposing tariffs on Chinese goods.
Analysts believe that the law is a necessary step for China, given the current trade climate. They point out that while China upgraded its Foreign Trade Law in 2004, the new Tariff Law explicitly states China's right to retaliate, sending a clear message to potential trade partners.
The law comes at a time when tensions between China and the West are rising. The European Union is considering tariffs on Chinese electric vehicles, while China is conducting its own anti-dumping investigation into EU brandy. This new law could further escalate these trade disputes.