BEIJING: China’s finance ministry on Tuesday (Feb 4) announced a package of tariffs on a range of US products in an immediate response to a 10 per cent tariff on Chinese imports announced by US President Donald Trump.
China imposed tariffs of 10 per cent on crude oil, farm equipment, large-displacement vehicles and pickup trucks, and 15 per cent on US coal and liquefied natural gas (LNG). The tariffs will take effect on Feb 10.
This move follows as US tariffs of 10 per cent on Chinese imports came into effect on Tuesday, risking a renewed trade war between the world’s top two economies as Trump punishes China for not halting the flow of illicit drugs.
Beijing’s commerce ministry said the levies on Chinese imports “seriously violates World Trade Organization rules”.
Trump on Monday suspended his threat of 25 per cent tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighbouring countries.
But there was no such reprieve for China, with new levies coming into effect at 12.01am (1pm, Singapore time) on Tuesday.
A White House spokesperson said Trump would not be speaking with Chinese President Xi Jinping until later in the week.
During his first term in 2018, Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy.
To end that trade war, China agreed in 2020 to spend an extra US$200 billion a year on US goods but the plan was derailed by the COVID-19 pandemic and its annual trade deficit had widened to US$361 billion, according to Chinese customs data released last month.
“The trade war is in the early stages so the likelihood of further tariffs is high,” Oxford Economics said in a note as it downgraded its China economic growth forecast.
Trump warned he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the United States.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” he said on Monday.
China has called fentanyl America’s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.
Source: CNA
