China has hit back against tariffs imposed by the US President, Donald Trump, with counter tariffs on American imports and other measures, reported CNN.
On Saturday, Trump announced a 10% tariff on imports coming from China, a move that led Beijing to file a complaint with the World Trade Organization (WTO) and take countermeasures against some US imports and companies.
Chinese Counter Tariffs
On Tuesday, the Chinese Ministry of Finance announced a 15% levy on certain types of coal and liquified natural gas and 10% tariffs on crude oil, agricultural machinery, large-displacement cars and pickup trucks coming from the US. These measures will take effect on February 10, 2025.
Furthermore, China’s Ministry of Commerce and customs administration introduced new export controls on several metal products and related technologies, including tungsten and tellurium, which are used in military equipment and solar panels, respectively.
Targeting US Companies
The Chinese Commerce Ministry also announced the inclusion of two American firms to its unreliable entities list for “violating normal market trading principles.” These firms are Illumina, a biotech company which has offices in China, and fashion retailer PVH Group, which owns Calvin Klein and Tommy Hilfiger.
Moreover, the Chinese State Administration for Market Regulation also issued a separate statement announcing it is initiating an anti-monopoly investigation into Google. The US company has minimal presence in China.
Retaliating against Trump’s Tariffs
The US President imposed tariffs on Mexico, Canada and China, citing threats related to the flow of drugs and undocumented immigrants from those countries to the US. These measures have prompted the targeted countries to respond with counter tariffs, sparking fears of a trade war that could have a great impact on their economies.
However, Trump agreed on a 30-day pause on tariffs against Mexico and Canada after both countries took steps to bolster border security to curb immigration and drug smuggling.
Meanwhile, China’s Ministry of Commerce said that it had brought Trump’s tariffs to the WTO dispute settlement mechanism. “The US practice seriously undermines the rules-based multilateral trading system, undermines the foundation of economic and trade cooperation between China and the United States, and disrupts the stability of the global industrial chain and supply chain,” it said in a statement.
Chinese Tariffs Impact
China’s tariffs against the US appear to have modest impact, according to analysts. According to US government estimates from 2020, China is the top global producer of tungsten concentrates, with over 80% of the world production. However, the tariffs cover a small proportion of overall bilateral trade.
With regards to this, the head of China Economics at financial insight firm Capital Economics, Julian Evans-Pritchard, said in a research note: “The measures are fairly modest, at least relative to US moves, and have clearly been calibrated to try to send a message to the US (and domestic audiences) without inflicting too much damage.”
He explained that the Chinese tariffs target at most $20bn of the country’s annual imports from the US, accounting for nearly 12% of the total, which is “a far cry” from the targeted Chinese goods by the US, which exceed $450bn.