US-Chinese trade restrictions likely to escalate further: Fitch

WASHINGTON

The possibility of more trade limitations between the U.S. and China is high, according to a report released by Fitch Ratings on Friday.

"We continue to view the risk of further – and potentially more disruptive – actions affecting trade between the two countries as high," it said.

On the other hand, the report said that the bilateral trade restrictions imposed so far by the U.S. and China were expected and had not changed Fitch's views on China and Chinese companies' credit profiles.

The U.S.' recent implementation of tariffs on Chinese imports raised the effective tariff rate to 20 percent, along with it eliminating an exemption that permitted Chinese exports to the U.S. valued less than $800 to enter without import tariffs or formal customs procedures.

"We still think U.S. tariffs on Chinese imports are likely to rise further in 2025, in line with President Donald Trump’s description of the 10 percent increase as an 'opening salvo' and his focus on reducing U.S. trade deficits," the statement added.

China’s economy is still expected to grow 4.3 percent in 2025 and to embrace a more expansionary fiscal policy.

Although the U.S. paused the implementation of 25 percent tariffs on Canada and Mexico, there is still a possibility of tariffs being imposed on goods from other markets like the EU, according to the report.

The tariffs on EU countries could affect the global demand for Chinese exports more than estimates, it added.