China can counterattack other countries through new tariff law

On the day that US Secretary of State Blinken concluded his visit to China, the news that China’s National People’s Congress passed the Tariff Law attracted public attention.

As the United States and the European Union have recently expressed concerns about China's overcapacity in industry that may cause dumping and launched multiple investigations, the ninth meeting of the Standing Committee of the National People's Congress of China passed a new "Tariff Law" on April 26, which is expected to be It will take effect on December 1, replacing the previous "Import and Export Tariff Regulations".

Reuters pointed out that the drafting of China's "Tariff Law" originated in 2022, and China used this to send a signal to its major trading partners that it has the ability to counter the tariff restrictions imposed by other countries on Chinese exports. Analysts also pointed out that the increasingly tense trade relations between China and Europe and the United States have made Beijing more convinced that it needs to consolidate and change existing measures. Henry Gao, a professor at Singapore Management University, told Reuters that China's move is like a nuclear weapon, and the purpose is not to use it, but to deter: "If you impose tariffs on us, we can do the same."

Article 17 of China’s Tariff Law stipulates that if a country that has signed most-favored-nation treatment or preferential tariff terms with China fails to fulfill the corresponding terms based on the principle of reciprocity, China may propose relevant response or retaliatory measures accordingly. Lin Qian, a partner at Beijing Deheheng Law Firm, told Reuters that this is the first time China has written such a principle into law. However, it is difficult to say whether this will have a significant impact on China's imports and exports, because most of the previous relevant provisions are still valid.