China retaliated to President Donald Trump’s tariffs on Chinese imports with an array of economic weapons designed to convince Washington that an escalation in the trans-Pacific trade war would quickly become painful for the United States, reports the Washington Post.
Retaliatory Measures
The Chinese government announced retaliatory measures against the U.S., including 15 percent tariffs on imports of U.S. coal, liquefied natural gas, agricultural equipment, and other goods. They also imposed restrictions on exports of minerals used in high-tech products and launched an antitrust investigation of Google. Additionally, two U.S. companies were blacklisted.
These actions followed the implementation of a 10 percentage point increase in U.S. tariffs on Chinese goods. While the Chinese tariffs are set to take effect on February 10th, providing a window for potential negotiations, the measures signal a significant escalation in the trade dispute.
Scott Kennedy, a China expert at the Center for Strategic and International Studies, noted that China’s tariffs, at 15 percent, exceed the 10 percent levies imposed by the U.S.
China’s customs and tariff regulator announced the 15 percent tariffs on coal and LNG, as well as 10 percent levies on crude oil, agricultural machinery, and certain vehicles. The Commerce Ministry also announced export restrictions on materials like tungsten, crucial for high-tech manufacturing, and imposed sanctions on two U.S. companies.
Renewed Conflict
Eight years after the initial trade tensions, Chinese officials are prepared for potential renewed conflict with the U.S.
Experts believe that the Chinese government perceives its economy to be in a stronger position than the U.S. government might believe. This confidence, coupled with recent technological advancements and successful diversification of trade and investment, emboldens China to resist perceived American pressure.
This is not the first instance of trade friction between the two nations. During his first term, the former U.S. president initiated a trade war with China, imposing tariffs on a substantial volume of Chinese goods. These actions were taken in response to accusations of unfair trade practices, such as intellectual property theft. China retaliated with its tariffs on U.S. goods.
A “phase one” trade deal was signed in 2020, wherein China committed to increasing U.S. imports by $200 billion over two years. However, Beijing fell short of this target, achieving less than 60% of the agreed-upon import volume.
The subsequent Biden administration maintained most of the Trump-era tariffs and even imposed new levies on goods such as electric vehicles.
Despite recent pronouncements of a desire to avoid a full-blown trade war, the former U.S. president has hinted at the possibility of re-imposing tariffs as a means of exerting pressure on China. China’s retaliatory measures, according to Professor Qiu Huafei of Tongji University, are aimed at securing leverage in future negotiations.
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Source: The Washington Post
