China has retaliated against Donald Trump’s decision to impose new 10 per cent tariffs on all Chinese imports, announcing its own wave of levies and an investigation into US tech giant Google.
The Chinese foreign ministry on Tuesday said Beijing has imposed 15 per cent tariffs on coal and liquefied natural gas, while oil and agricultural equipment from the US will face a 10 per cent levy. The new tariffs on US exports will start on 10 February, the ministry said.
The Trump administration’s tariffs on Chinese goods, which Beijing called a "serious violation” of international trade rules, came into effect at 12.01am Eastern Time on Tuesday.
Shortly after taking office, Mr Trump announced the US would impose a 25 per cent tariff on imports from Canada and Mexico, alongside the 10 per cent tariff on Chinese goods. He claimed the move was related to the flow of fentanyl, a powerful synthetic opioid, into the US.
However, the measures against Mexico and Canada were paused on Monday after talks between those governments and the Trump administration.
The Chinese commerce ministry said it would impose export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items to "safeguard national security interests".
Beijing controls much of the world's supply of such rare earths, which are critical for the production of many electronic components as well as the global clean energy transition.
“The US’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organisation,” the finance ministry said in a statement on Tuesday. “It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the US.”
China also hit back at the US with an investigation into Google for alleged anti-trust violations. Stocks in Hong Kong declined after China's retaliation, while the dollar strengthened and the Chinese yuan fell.
The retaliatory levies were announced hours after Mr Trump on Monday said he planned to speak with Chinese president Xi Jinping within the next 24 hours. It was not clear when the phone call was supposed to take place.
China had urged Mr Trump against imposing additional tariffs on an estimated $400bn (£322bn) in goods that Washington purchases from Beijing annually, urging dialogue while vowing to impose “countermeasures” if the US president went ahead.
A spokesperson for the Chinese embassy earlier this year said "there is no winner in a trade war or tariff war" and that it didn't serve the interests of either side or the world.
During his first term in 2018, Mr Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy.
In 2020, China ended the row by agreeing to spend an extra $200bn (£161bn) a year on US goods, but the plan was derailed by the Covid-19 pandemic and its annual trade deficit has since widened to $361bn (£291bn), according to Chinese customs data released last month.
This article was written by Alisha Rahaman Sarkar from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
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