(qlmbusinessnews.com . Wed 5th Feb, 2025) London, UK —
China Hits Back at US Tariffs with a Range of Countermeasures
The trade tensions between China and the United States have escalated once again, with Beijing unveiling a series of retaliatory measures following President Donald Trump's introduction of a blanket 10% tariff on all Chinese imports.
China's response includes new tariffs on American goods, investigations into US tech firms, and export controls on crucial rare metals. These moves mark the latest chapter in a trade dispute that has been ongoing since 2018. Despite hopes for a potential resolution, the conflict continues to present challenges for industries and economies worldwide.
Fossil Fuel Tariffs
Among China's countermeasures are new taxes on US fossil fuels, including a 10% import tax on coal and liquefied natural gas (LNG) and a 15% charge on crude oil.
Despite being the world's largest coal importer, China primarily sources the commodity from Indonesia, Russia, and Australia. US imports represent only a small fraction of China's fossil fuel supply. Analysts suggest that China's economy may face minimal disruption as it can easily seek alternative suppliers, including Russia.
On the other hand, the US, a leading LNG exporter, can rely on other major markets such as the UK and the European Union.
Tariffs on Vehicles and Agricultural Machinery
In addition to fuel, Beijing has imposed a 10% tariff on agricultural machinery, pick-up trucks, and large vehicles. However, the impact is expected to be limited, as China imports relatively few US-made vehicles and has invested heavily in developing its domestic agricultural machinery industry to enhance food security.
Trade expert Julian Evans-Pritchard noted that China's tariff measures target approximately $20bn (£16bn) worth of US imports annually — a fraction compared to the $450bn worth of Chinese goods subject to US tariffs. He added that China's response appeared to be a calculated move designed to send a message without causing significant harm to its economy.
Tech Giant Google Under Investigation
China has also launched an anti-monopoly investigation into US tech giant Google. Although Google's search engine has been blocked in China since 2010, the company continues to offer apps and games through local partnerships.
Given that China generates only about 1% of Google's global sales, experts suggest that the tech giant would experience limited financial impact if it were to cease operations in the region.
Calvin Klein and Tommy Hilfiger Face Regulatory Hurdles
PVH, the parent company of fashion brands Calvin Klein and Tommy Hilfiger, has been added to China's “unreliable entity” list. This designation could lead to sanctions, fines, and the revocation of work visas for foreign employees.
The move is seen as a response to the US government's own “entity list,” which restricts certain Chinese companies from accessing US products.
Export Controls on Rare Metals
Beijing has further tightened export controls on 25 rare metals, including tungsten, a critical material used in aerospace manufacturing.
China accounts for nearly 90% of global refined rare metal production. However, key metals imported from the US, crucial for high-end technologies such as semiconductors and aerospace equipment, have not been targeted.
While the export restrictions are likely to cause delays as companies apply for licences, Washington appears to have already taken steps to secure alternative sources of rare earth metals, including agreements with Ukraine.
As the trade war continues, industries worldwide brace themselves for the impact of these escalating tensions.
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