China's retaliatory tariffs on $14 billion worth of US goods now in effect

China’s Retaliatory Tariffs on $14 Billion in US Goods Now in Effect

In tit-for-tat to US President Donald Trump’s tariff threats, China has imposed retaliatory tariffs on approximately $14 billion worth of US goods, escalating the trade war between the world’s two largest economies, the Financial Times reported.

Beijing announced its tariff plan on February 4, minutes after new US levies of 10% on all Chinese products took effect. Trump had called these tariffs as an “opening salvo” in a renewed trade offensive against China.

Unlike the blanket tariffs imposed by the US, China’s countermeasures—ranging from 10% to 15% levies—target key American exports, including liquefied natural gas, coal, crude oil, farm equipment and certain automotive products. Analysts view Beijing’s approach as leaving room for potential negotiations to prevent a broader trade war.

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However, by Sunday’s deadline, no agreement had been reached. China’s embassy in Washington confirmed that the tariffs took effect at 12:01 a.m. Beijing time on Monday (11:01 a.m. Sunday in Washington, D.C.), according to reports.

Starting February 10, China will impose a 15% border tax on U.S. coal and liquefied natural gas imports, alongside a 10% tariff on American crude oil, agricultural machinery, and large-engine vehicles.

Last week, Beijing’s State Administration for Market Regulation said the US tech giant was “suspected of violating the Anti-Monopoly Law of the People’s Republic of China”. It has “launched an investigation into Google in accordance with the law” as a result, the administration said in a statement.

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The US tech behemoth’s core search engine and many of its services are blocked in mainland China, where US internet titans have long struggled with doing business due to the “Great Firewall” that blocks politically sensitive content.

Trump had said that The International Monetary Fund, which last month warned that a spike in protectionist policies could hit investment and disrupt supply chains, said it was “in the interests of all to find constructive ways to resolve disagreements and enable trade.”

Capital Economics, a UK-based research firm, estimated that China’s additional tariffs would apply to about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff that took effect at 12:01 a.m. ET on Tuesday (0501 GMT).

Is it the starting phase of a trade war?

On Friday, Trump announced a plan to introduce “reciprocal tariffs” on other nations in the coming days to reshape the US’s global trade relationships. While he did not specify which countries would be targeted, he suggested it would be a broad effort that could also address U.S. budget concerns.

“This could become a very, very bad situation,” Financial times cited Zhang Yanshen, an expert at the China Center for International Economic Exchanges, as saying. “This could be just the beginning of this phase of the trade war,” they added.

Trump said on Tuesday he is in no hurry to speak to Chinese President Xi Jinping to try to defuse a new trade war between the world’s two largest economies sparked by his sweeping 10% tariffs on all Chinese imports.

Trump administration officials have also reiterated that he wants China to stem the flow of the deadly drug, fentanyl. Beijing-based experts don’t think that is the case.

“Fentanyl is an issue that can easily be addressed — China has already been cooperating with the US side on this,” said John Gong, professor at the University of International Business and Economics. “So Trump probably wants something more that they cannot publicly talk about.”

This could be things like pushing China to pressure Russia over the Ukraine war, for instance.

Chinese experts said it would be difficult for Beijing to reach a “grand bargain” on a short deadline, especially on thorny subjects such as the war in Ukraine over which the US has accused China of helping Russia.

With inputs from agencies