China’s Commerce Ministry said it was imposing tariffs on a range of US products in response to US President Donald Trump’s decision. China also announced other trade-related measures, including an investigation into Google.
According to an official statement, China will impose a 15 percent tariff on coal and liquefied natural gas, and a 10 percent tariff on crude oil, agricultural machinery and large-capacity cars. The decision comes in response to US tariffs imposed by President Donald Trump, which took effect this morning.
The new tariffs on US exports will take effect on February 10, the Chinese ministry said.
-“We should get used to this”-
While US and European stock futures were up after yesterday’s good news from Canada and Mexico, they are down again this morning as investors fear a trade war between the US and China, similar to the one that occurred during Trump’s first term.
“I think we should get used to this, a kind of rollercoaster ride of public negotiations on tariffs and other policies,” said Ross Mayfield, an analyst at Baird.
Moments after the tariffs were officially implemented, Trump posted a photo with the caption, “What we do best is impossible in America.”
–China’s response-
“The U.S. unilateral tariff increase seriously violates World Trade Organization rules,” China’s Ministry of Commerce said in a statement. “It is not only unhelpful in solving its own problems, but also detrimental to normal economic and trade cooperation between China and the United States.”
The 10 percent tariff ordered by Trump on China went into effect today, although Trump still plans to hold talks with Chinese President Xi Jinping in the next few days in an attempt to ease tensions between the world’s two largest economies.
In addition to the tariffs, China’s State Administration for Market Regulation announced that it was investigating Google for suspected antitrust violations. While the announcement did not specifically mention tariffs on tech products, the announcement came just minutes after US tariffs of 10 percent were set to take effect.
–Additional measures–
Chinese authorities have also announced they are launching an antitrust investigation into Alphabet Inc., which includes Google, and will place PVH Corp, the holding company for brands such as Tommy Hilfiger and Calvin Klein, and U.S. biotech company Illumina on its “untrusted entity list.”
Trump has warned that he may further increase tariffs on China if Beijing does not stop the flow of fentanyl, a deadly opioid, into the United States. “Hopefully China will stop sending us fentanyl, and if not, the tariffs will be significantly higher,” he said.
China has called fentanyl a US problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open to negotiations.
–New Trade War?–
During Trump’s first term in 2018, trade relations between the US and China escalated into a full-blown tariff war. Trump, following his “America First” policy, imposed a series of tariffs on hundreds of billions of dollars worth of Chinese products, which prompted Chinese retaliation.
Under the Biden administration, most of those tariffs have remained in place, and some have been increased. Biden has taken a more targeted approach, focusing on strategic sectors such as semiconductors and electric vehicles.
Despite the trade tensions, the two countries’ economies remain deeply intertwined. China and the US remain among their largest trading partners – US imports from China in the first 11 months of last year amounted to $401 billion, while Chinese imports from the US reached $131 billion.
Trump last night postponed the introduction of tariffs on Mexico and Canada, and is also threatening tariffs on the European Union, the AP writes.
