China hits back at Trump with tariffs of its own

In response to the tariff policies previously implemented by U.S. President Donald Trump, China's Ministry of Commerce announced retaliatory measures against U.S. goods, imposing additional tariffs. This retaliation aims to respond to the unilateral actions of the U.S. and safeguard China's legitimate rights and interests.

Specifically, China will impose a 15% tariff on coal and liquefied natural gas (LNG) products, and a 10% tariff on crude oil, agricultural machinery, and large-displacement vehicles. The implementation of these tariff measures is expected to impact U.S. exports of related products to China, potentially reshaping trade dynamics.

Concurrently, U.S. President Trump announced the suspension of tariffs on Canada and Mexico, following agreements reached with the leaders of both countries. However, Trump did not suspend the 10% comprehensive tariff on China, which took effect on the same day, covering all imported goods from China, including previously exempt goods valued at less than $800 (A$1300).

The cancellation of the previous tax exemption policy for small-value goods will significantly impact online shoppers, especially those who frequently purchase goods directly from Chinese companies such as Shein or Temu. Affected by this news, the Australian stock market turned from gains to losses on the same day, and the Australian dollar exchange rate also fell below 62 U.S. cents, signaling market uncertainty.

In addition, China's State Administration for Market Regulation announced that it is investigating Google's antitrust behavior. Earlier this week, a Chinese Foreign Ministry spokesperson stated that there are no winners in a trade war and called on the U.S. to view and resolve the fentanyl issue in an objective and rational manner, rather than threatening other countries with tariffs. China urges the U.S. to correct its erroneous practices, maintain the positive momentum of Sino-U.S. drug control cooperation, and promote the stable, healthy, and sustainable development of bilateral relations.

China's targeted tariffs will have a significant impact on U.S. imports. Data shows that in 2022, the U.S. exported $11 billion worth of crude oil, over $1 billion worth of coal, and $4 billion worth of automobiles to China. These commodities will all be affected by the new tariffs, which could lead to adjustments in trade flows.

It is worth noting that these tariff measures may benefit Australian exporters. In 2022, Australia exported $2 billion worth of crude oil and $22 billion worth of liquefied natural gas to China. Last year, China became Australia's largest coal customer. This means that Australia may be able to fill the void left by the U.S. in the Chinese market to some extent, potentially strengthening trade ties between the two countries.