Tuesday, February 4, 2025
Year : 2, Issue: 23/strong>
NBC: China retaliated immediately Tuesday as a 10% U.S. tariff on all Chinese goods went into effect, announcing a series of measures including its own levies of 10% to 15% on some U.S. products.
Starting Feb. 10, China will impose an additional tariff of 15% on coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, large-displacement automobiles and pickup trucks, the government said.
The Chinese announcement came minutes after the U.S. tariff took effect at 12:01 a.m. ET, the only one to go ahead after President Donald Trump paused 25% tariffs he had announced on goods from Canada and Mexico.
The failure to forestall tit-for-tat tariffs with China raises the risk of a spiraling trade war between the world’s two biggest economies.
“This unilateral tariff hike by the U.S. side seriously violates World Trade Organization rules, does nothing to solve its own problems, and undermines normal China–U.S. economic and trade cooperation,” the Customs Tariff Commission of the State Council, China’s Cabinet, said in a statement.
In addition, Beijing announced an investigation into Google for alleged anti-trust violations, and export controls on items related to tungsten and other rare earth elements that are critical components of high-tech products.It also said U.S. gene sequencing company Illumina and PVH Corp., the owner of Calvin Klein and Tommy Hilfiger, would be added to the “unreliable entity list,” restricting their ability to operate in China.
Mainland Chinese markets remain closed for the Lunar New Year holiday. Other Asia-Pacific markets were mostly still up on news that the Canadian and Mexican tariffs had been put on hold, CNBC reported, though stocks in the Chinese territory of Hong Kong pared gains.
Beijing said it had referred the U.S. tariff measures to the World Trade Organization “to safeguard its legitimate rights and interests.”
The additional U.S. tariff “seriously violates WTO rules and is an egregious act, representing typical unilateralism and trade protectionism,” a spokesperson for the Chinese Ministry of Commerce said.
The U.S. has blocked the appointments of appellate judges to the World Trade Organization since Trump’s first term, leaving it largely unable to mediate international trade disputes. But China could still use a lawsuit to gather international support against the U.S. tariffs.
Beijing’s newly announced tariffs are more targeted than the U.S. tariff, which appears to apply to all Chinese products, and some may have more impact than others. China doesn’t import much crude oil from the U.S., for example, while Google is blocked in China and has limited business in the country after withdrawing in 2010 over a censorship dispute.
Others could present more of a challenge. The U.S. imports about a quarter of its tungsten from China, which produces about 80% of the world’s supply, meaning there are few alternative sources. The critical metal is used by chipmakers such as Nvidia.
China’s tariffs are “largely symbolic” and will have limited impact on the U.S., said Tianchen Xu, senior economist at the Economist Intelligence Unit in Beijing, adding that they cover only 8.5% of all Chinese imports from the U.S. last year.
They also represent a change in approach from Trump’s first term, when China responded to tariffs more strongly. That is more difficult now as China struggles with an economic slowdown.
“Trump wants a lot from the Chinese side, and he will launch one attack after another,” Xu said in an email. “China has no intent to escalate the conflict, given that any escalation will exert further pressure onto its economy.”
