China announced on Tuesday that it is imposing tariffs on some U.S. imports in response to new U.S. duties on Chinese goods, raising trade war fears between the world’s top two economies. China’s response came after President Donald Trump postponed the imposition of tariffs on Mexico and Canada.
An additional 10 percent tariff on all Chinese imports into the U.S. came into effect at 5:01 GMT today after Trump repeatedly warned Beijing it was not doing enough to halt the flow of illicit drugs into the United States.
China to impose tariffs on key U.S. exports
Directly after the decision came into effect, China’s Ministry of Finance said it would impose tariffs of 15 percent on U.S. coal and LNG and 10 percent on crude oil, farm equipment and the small number of trucks as well as big-engine sedans shipped to China from the United States.
The U.S. is not a major source of crude oil for China, accounting for only 1.7 percent of its imports last year, worth about $6 billion. In addition, just over 5 percent of China’s LNG imports come from the U.S.
China added that it was starting an anti-monopoly investigation into Alphabet’s Google. It added that it is also including both PVH Corp, the holding company for brands including Calvin Klein, and U.S. biotechnology company Illumina, on a list for potential sanctions in China.
In another announcement, China’s Ministry of Commerce and the Customs Administration said they are imposing export controls on some metals that are critical for electronics, military equipment and solar panels.
Moreover, a 10 percent duty China announced on electric trucks imported from the U.S. could apply to future sales for Elon Musk’s Cybertruck, an electric vehicle Tesla has been promoting in China.
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Tariffs to start on February 10
China’s new tariffs on some U.S. exports will start on February 10, giving the two sides some time to reach a deal that Chinese policymakers have indicated they hope to strike with Trump.
Trump plans to speak to Chinese President Xi Jinping later in the week, a White House spokesperson said.
He also warned that he might increase tariffs on China further unless Beijing halted the flow of fentanyl into the United States. In response, China has called fentanyl an American problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures. However, it also left the door open for talks.
During his first term, Trump launched a two-year trade war with China over its large U.S. trade surplus.
On Monday, Trump suspended his order of 25 percent 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 neighboring countries.
