China imposed new tariffs on goods imported from the United States on February 4. This is a response to the additional 10% tariffs imposed by the United States on the same day, which will apply to all Chinese goods imported into the United States.
Trump, both during the election campaign and since his inauguration, has accused Beijing of not taking the necessary and sufficient measures to stop the growing flow of illegal drugs into the United States. Accordingly, the additional tariffs are also a kind of punitive measure against China.
China’s Ministry of Finance announced shortly after the US tariffs went into effect that it would impose an additional 15% tariff on US coal and liquefied natural gas, and a 10% tariff on crude oil, farm equipment, and small trucks, as well as large sedans imported into China from the US. The additional 10% tariff could also apply to Elon Musk’s Cybertrucks, which Tesla produces.
The tariffs will take effect on February 10, but U.S. crude oil prices fell 2% shortly after the announcement.
According to the U.S. Energy Information Administration, in the first 11 months of 2024, compared with the same period the previous year, China’s imports of U.S. crude oil fell by 52% or about 230,540 barrels of oil per day.
For the full year, U.S. crude accounted for 1.7% of China’s total imports, or about $6 billion, down from 2.5% in 2023, according to Chinese customs data.
Mia Geng, an analyst at FGE, stated that when China imposed 25% tariffs on U.S. crude during Trump’s first term in office, it stopped buying about 300,000 to 400,000 barrels of crude oil per day and used West African and Asian supplies as alternatives.
In addition, China has targeted American businesses, including Google, Calvin Klein and others. China’s Ministry of Commerce said it had already added PVH (PVH.N), a holding company that owns brands such as Tommy Hilfiger and Calvin Klein, and U.S. biotechnology firm Illumina, to a list of “unreliable entities.” The ministry said the two companies had taken discriminatory measures against Chinese enterprises and had infringed on the legitimate rights and interests of Chinese companies. China could impose fines or other sanctions on entities or companies on the list, including suspending or freezing trade and revoking work permits for foreign personnel.
Additionally, China’s State Administration for Market Regulation said Google is suspected of violating the country’s antimonopoly laws and has already launched an investigation into the company. Google’s products, such as its search engine, are blocked in China, although it works with local partners, such as advertising companies.
Besides China, the newly elected president of the United States has also imposed additional sanctions on Canada and Mexico. The Canadian prime minister announced a 25% retaliatory tariff on American goods on February 1, warning the American people that they would have to pay for Trump’s actions. After that, Trump temporarily suspended his decision and gave Canada and Mexico 30 days to eliminate criminal activities along the border.
China has not been given a similar opportunity, although according to Trump’s press secretary, the 47th President of the United States is planning a phone conversation with Chinese President Xi Jinping this week in order for the world’s two largest economies to reach some kind of agreement before a new trade war becomes inevitable.
