The People’s Republic of China announced it was retaliating against the United States with tariffs on specific U.S. imports. China’s decision came after President Donald Trump imposed a 10% tariff on Chinese products imported into the U.S., which went into effect at 12:01 a.m. on Tuesday.
The Ministry of Finance of the People’s Republic of China said it would impose a 10% tariff on several U.S. products, including crude oil imports, agricultural machinery, and cars and pickup trucks. A separate 15% tariff would be placed on coal and liquefied natural gas imports from the U.S. Both tariffs are scheduled to go into effect on Feb. 10.
“The U.S.’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization,” the notice from China’s finance ministry read. “It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the U.S.”
Additionally, in a separate retaliatory maneuver, China said it was investigating Google for possibly violating the country’s anti-monopoly law. Depending on the results of the investigation, the tech giant could face several sanctions for any supposed infractions. Furthermore, CNBC reported that China also imposed “export controls” on several essential minerals, such as molybdenum, ruthenium, tellurium, and tungsten.
However, China’s actions are modest compared to the U.S. tariffs, according to several analyses. The communist country’s decision to impose tariffs and certain restrictions should be considered a measured response that allows a certain flexibility for the country to avoid significant escalation while also saving face for its citizens.
China’s actions on Tuesday were essentially a “symbolic move for now,” Louise Loo, an economist at Oxford Economics, told CNBC.
Other economists expressed similar sentiments.
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“These moves are warnings that China intends to harm U.S. interests if need be but still give China the option to back down,” said Julian Evans-Pritchard, head of China economics at Capital Economics. “The measures are fairly modest, at least relative to U.S. moves, and have been calibrated to send a message to the U.S.”
Meanwhile, Loo cautioned about a trade war between China and the U.S. She said both countries were “clearly in the early stage” of such a conflict and expected both countries to impose more tariffs, speculating that such an escalation between the two countries was “a very high likelihood.”
