Trump tariffs: China's tit-for-tat levies on US take effect

The US-China trade war continues to escalate, with China's retaliatory import tariffs on some US goods taking effect on Monday. This follows US President Trump's threat to impose tariffs on more countries, further intensifying global trade tensions. Beijing announced this plan on February 4th, almost simultaneously with the US imposing new 10% tariffs on all Chinese products.

Last Sunday, Trump stated that he would impose a 25% tariff on all steel and aluminum products entering the US, with plans for a formal announcement on Monday. While aboard Air Force One en route to the Super Bowl, Trump told reporters that he also planned to impose reciprocal tariffs on other countries, without explicitly naming specific target nations.

China's latest tariffs on US goods include a 15% border tax on US coal and liquefied natural gas products. In addition, US crude oil, agricultural machinery, and large-displacement vehicles will face a 10% tariff. Concurrently, China is also intensifying its regulatory scrutiny of US companies, including launching an antitrust investigation into Google and adding PVH, the US parent company of Calvin Klein and Tommy Hilfiger, to its so-called "unreliable entities list."

Beyond tariff measures, China has also imposed export controls on 25 kinds of rare metals, which are critical components in many electronic products and military equipment. Trump's weekend announcement of plans to impose 25% tariffs on US steel and aluminum imports came after he had just reached agreements with Canada and Mexico, averting previously threatened 25% tariffs on all goods from those countries. Trump also took similar measures during his first presidential term, imposing a 25% tariff on steel and a 10% tariff on aluminum, but later granted duty-free quotas to several trading partners, including Canada, Mexico, and Brazil.

On the day after the latest tariffs took effect, Beijing accused Washington of making "baseless and false accusations" about China's role in the trade of the synthetic opioid fentanyl, using this as justification for the tariff measures. China has filed a complaint with the World Trade Organization (WTO), arguing that the US import tariffs are "discriminatory and protectionist" and violate trade rules. However, experts warn that China is unlikely to obtain a favorable ruling, as the WTO dispute settlement panel remains inoperable.

Trump had previously stated that he was in no hurry to hold talks with Chinese President Xi Jinping. Since taking office on January 20th, many measures enacted by Trump are potentially subject to change. Last Friday, he suspended tariffs on small packages arriving from China, which, along with the additional 10% tariffs, had taken effect on February 4th. The suspension will last until "adequate systems are established to fully and promptly process and collect tariff revenue." Previously, the US Postal Service (USPS) and other agencies scrambled to comply after the duty-free treatment for goods valued under $800 ended, with USPS briefly suspending the acceptance of packages from China, only to reverse its decision a day later.