China on Tuesday (July 25) pushed back against allegations of overcapacity in the world’s second-largest economy, ahead of the expected release of a US investigation into the matter. The probe’s findings could trigger new tariffs on Chinese goods.
At a regular press briefing, a Chinese foreign ministry spokesperson stressed that the overcapacity accusations are baseless and politically motivated, aimed at pressuring China’s manufacturing sectors. Beijing asserts that its economic policies comply with market rules and involve no improper subsidies.
The move comes as the US administration reviews Chinese supply chains and production capacity, particularly in steel, aluminum, electric vehicles, and solar panels. The investigation results are due soon and may recommend additional tariffs to protect US domestic manufacturing.
Washington has repeatedly criticized China for producing steel and aluminum far beyond global demand, driving down prices and harming producers elsewhere. Beijing, however, argues that these concerns are exaggerated and that most of its output serves domestic needs.
Analysts warn that trade tensions between the world’s two largest economies could escalate if the US imposes higher tariffs, disrupting global supply chains and slowing the post-pandemic economic recovery. China has called on the US to cooperate for mutual benefit and avoid unilateral actions that damage bilateral trade.
