China’s Exporters Have Branched Out Beyond High-Tech Products, Risking Even More Tariffs

What’s going on here?

China’s overzealous factories have already provoked glares from around the world, and they’re only going to intensify now that the country’s exporters have branched out beyond high-tech products.

What does this mean?

Trade spats with China are nothing new. In fact, the US brought in more tariffs just last month, and the EU will consider dishing out taxes on Chinese EVs next week. See, China’s real estate slump is making folk spend less, because much of their financial confidence is tied to the value of their homes. So Chinese producers have been flooding the global market with leftovers of EVs and green tech – and now, they’re shipping out everything from steel to animal feed at rock-bottom prices that are near impossible to compete with.

Why should I care?

Zooming out: Neither here nor there.

China was hit with a record number of taxes last year, all designed to stem the flow of ultra-cheap exports. They weren’t just from the US and Europe either: a lot of the pushback came from countries like India and South Korea. But China’s not slowing down: its iron and steel exports hit a record 13 million tons in March and April. What’s more, the country’s on track to produce a billion tons of steel again this year – a lot of which will end up being shipped abroad. And as China’s factories keep churning out exports, more countries might join in retaliating.

The bigger picture: Pieces of the pie.

The choice for countries is tricky: impose tariffs and risk retaliation, or do nothing and watch local businesses go under. To make matters worse, the International Monetary Fund recently warned that the breakdown in trade relationships could slash global economic output by up to 7% in the next few years. That would hit countries like China, Japan, and South Korea hardest, because they rely most on international trade.