China has announced retaliatory tariffs against the US after President Donald Trump imposed a 10% tax on all Chinese imports.
The counter-measures include a 15% tax on coal and liquefied natural gas imports from the US, while crude oil, agricultural machinery, pickup trucks and large-engine cars will face a 10% tariff. These are expected to come into force next Monday.
China has complained to the World Trade Organization (WTO) – accusing the US of breaking international rules.
Trump says the tariffs are a response to trade deficits – as well as an effort to curb the flow of the opioid fentanyl. His administration says chemicals used to make the drug come from China.
Beijing has previously said that America’s fentanyl crisis was its own issue.
The new US tariff of an additional 10% on Chinese imports came into effect on Tuesday.
In a statement announcing its response, China said the move was “not only unhelpful in solving its [America’s] own problems, but also undermines the normal economic and trade cooperation between China and the US”.
Other steps Beijing has taken in response to the Trump administration’s new tariffs include adding more US companies to its blacklist “unreliable entity” list.
This time PHV Corp, the company that owns fashion brands Calvin Klein and Tommy Hilfiger, and US biotechnology firm Illumina, have both been targeted.
In a statement, China’s commerce ministry accused the firms of “discriminatory measures against Chinese enterprises”.
Firms added to the list may face a number of sanctions including fines and having the work visas of their foreign employees revoked.
Beijing has also announced plans to restrict the export of 25 critical minerals, some of which are key components for electrical products.
These include tungsten, which is difficult to source and a crucial material for the aerospace industry, tellurium, widely used for solar panels, and molybdenum, which is used to strengthen steel alloys.
A Chinese watchdog has launched an investigation into Google for alleged violations of competition rules, known as antitrust.
Although Google’s search services have been blocked in China since 2010, it still has some business activities in China. It still provides apps and games to the Chinese market through partnership with local developers for example.
Both the US and China have in the past imposed tariffs on hundreds of billions of dollars’ worth of one another’s goods in the past as part of an ongoing trade war.
Meanwhile, Trump has suspended for 30 days the 25% tariffs on Mexico and Canada that he threatened.
After last-minute negotiations, the two US neighbours agreed to stricter border security and taking bigger steps to address fentanyl trafficking – a win for Trump’s strategy of leveraging the US economy to force concessions from other countries.
Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year.
It remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up.
That uncertainty stirs fears that could see businesses reducing their reliance on American markets, holding off on investing in building new factories or hiring workers until the trade stand-off becomes clearer.
