Femi Ashekun/
China has imposed $14 billion worth of retaliatory tariffs on US goods, its embassy in Washington announced yesterday, escalating tensions in an ongoing trade war between the world’s two largest economies.
The measures come in response to the United States’ decision to levy an additional 10% tariff on Chinese products, which President Donald Trump described as an “opening salvo” in a renewed offensive against Beijing.
China’s new tariffs, effective from 12.01am Beijing time today (11.01am yesterday in Washington), target liquefied natural gas, coal, crude oil, farm equipment, and some automotive goods with duties of 10% to 15%.
Unlike the blanket US tariffs, Beijing’s response appears measured, leaving room for potential negotiations. However, no progress on talks was reported by the Sunday deadline.
Beijing has also ramped up its countermeasures beyond tariffs, launching antitrust probes into Google and Illumina, a US biotechnology company, and blacklisting PVH Corp, the holding company of US clothing brands Calvin Klein and Tommy Hilfiger.
Additionally, China has tightened its grip on the global supply of rare earths, restricting exports of five critical metals essential to US defense, green energy, and tech industries.
This move highlights China’s dominance in rare earth production—accounting for 60% of global output and 90% of processing capacity. Analysts see the rare earth restrictions as a strategic warning to the US, signaling that Beijing could leverage its control over critical materials if trade tensions continue to escalate.
Financial markets initially hoped for a resolution, mirroring Trump’s previous approach with Canada and Mexico, where tariffs were followed by last-minute negotiations.
However, Trump’s comment that he is in “no rush” to speak with Chinese President Xi Jinping has diminished hopes of an immediate resolution.
Experts suggest Beijing was irked by Trump’s tactics, including the abrupt announcement of the US tariffs just two days before they took effect and a lack of formal diplomatic engagement.
Trump has further accused China of failing to curb the flow of fentanyl into the US and has instructed the US Trade Representative (USTR) to investigate China’s compliance with the 2020 trade deal, with a report due by April 1 that could ignite another round of conflict.
Despite the heightened tensions, economists argue that China may be better positioned to withstand the impact of US tariffs this time.
Frederic Neumann, chief Asia economist at HSBC, noted that Chinese export prices have declined significantly compared to competitors, making many Chinese firms capable of absorbing a 10% tariff.
However, concerns linger that the current measures could be a precursor to harsher trade restrictions. “The big worry, of course, is this is a prelude to potentially larger trade restrictions,” Neumann said.
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