In a swift response to the new U.S. tariffs on Chinese goods, China announced on Tuesday (February 4) that it would impose additional tariffs on some U.S. imports from next Monday (February 10), while launching a number of countermeasures such as corporate investigations, intensifying the confrontation between the world's two largest economies. Earlier, U.S. President Donald Trump suspended tariff measures on Mexico and Canada.
From 00:00 on February 4, Eastern Time, the United States imposed an additional 10% tariff on all Chinese imports. Previously, Trump had repeatedly warned Beijing that it was not doing enough to curb the flow of illegal drugs into the United States.
Within minutes, China's Tariff Commission announced that it would impose a 15% tariff on U.S. coal and liquefied natural gas, and a 10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks.
China announced a 10% tariff on electric trucks imported from the United States, which may apply to future sales in China of Tesla CEO Elon Musk's electric pickup truck "Cybertruck", a niche product that Tesla has been promoting in China.
Tesla did not immediately comment on this.
On the same day, China also launched a number of countermeasures.
China's State Administration for Market Regulation said it has launched an antitrust investigation into Google's parent company Alphabet Inc. for suspected violations of the Anti-Monopoly Law of the People's Republic of China. The Ministry of Commerce will include PVH, the holding company of brands such as Calvin Klein, and Illumina Inc, a US biotechnology company, on the "Unreliable Entity List", prohibiting them from engaging in import and export activities related to China.
In addition, China's Ministry of Commerce and the General Administration of Customs said they would impose export controls on some rare earths and metals, which are essential for electronic products, military equipment and solar panels.
China’s new tariffs on certain U.S. exports are set to take effect on Feb. 10, giving Washington and Beijing time to try to reach a deal that Chinese policymakers have said they hope to reach with Trump.
China’s retaliatory measures are more limited in scope than the Trump administration’s sweeping tariffs on Chinese imports, continuing Beijing’s more measured approach in this round of trade tensions.
A White House spokesman said Trump plans to speak with Chinese President Xi Jinping later this week.
On Monday, Trump suspended a last-minute threat to impose 25% tariffs on Mexico and Canada, agreeing to a 30-day reprieve in exchange for concessions from the two neighbors on border and crime enforcement.
During his first term, Trump launched a two-year trade war over China’s huge trade surplus with the United States, with both sides imposing tariffs on hundreds of billions of dollars of goods, disrupting global supply chains and damaging the world economy.
“The trade war is in its early stages, so the likelihood of further tariffs is high,” Oxford Economics said in a report, lowering its forecast for Chinese growth.
Oil prices extended losses, falling 2%, while Hong Kong stocks gave up some gains after China took retaliatory measures. The dollar strengthened, while the yuan, euro, Australian and Canadian dollars and Mexican peso all fell, reflecting growing concerns that the global trade war could be protracted.
"Unlike Canada and Mexico, it is obviously more difficult for the United States and China to reach the agreement Trump requires economically and politically," said Gary Ng, senior economist at French bank Natixis in Hong Kong. "Previous market optimism about a quick deal still seems uncertain."
"Even if the two countries can agree on some issues, tariffs may still be used repeatedly as a tool, which may become a key factor in market volatility this year," he said.
China's Ministry of Commerce also said on Tuesday that it had filed a lawsuit at the World Trade Organization (WTO) against the United States for imposing a 10% tariff on Chinese products.
