China imposed duties on U.S. goods in response to Trump’s tariff policy

On Tuesday, China imposed tariffs on imports from the United States in response to new U.S. tariffs on Chinese goods, which renewed the trade war between the world’s two largest economies. At the same time, US President Donald Trump decided to postpone the introduction of duties against Mexico and Canada. This is reported by Reuters.

An additional 10% duty on all Chinese imports to the United States went into effect on Tuesday at 12:01 a.m. ET after repeated warnings from Trump that Beijing was not doing enough to stop the flow of illegal drugs to the United States.

In response, the Chinese Ministry of Finance announced that it will impose a 15% duty on US coal and LNG (liquefied natural gas), as well as a 10% duty on oil, agricultural equipment, and some cars. The new tariffs will take effect on February 10.

On Monday, Trump suspended the 25% tariffs on Mexico and Canada, agreeing to a 30-day pause in exchange for increased border control and crime fighting.

However, China did not receive such an exception. A White House spokesman said that Trump does not plan to speak with Chinese President Xi Jinping before the end of the week.

Trump has warned that he could further raise tariffs on Chinese goods if Beijing does not limit the export of fentanyl, a dangerous opioid that is spreading in the United States.

“I hope China stops supplying us with fentanyl, otherwise the tariffs will go up even more,” Trump said on Monday.

In response, China said that the fentanyl problem is an internal US problem and should be solved at their level. At the same time, Beijing plans to challenge the new duties in the World Trade Organization (WTO) and take other countermeasures, but does not close the door to further negotiations.

“Unlike Canada and Mexico, it is much more difficult to reach an agreement between the US and China, both politically and economically. Market hopes for a quick trade deal look increasingly unlikely,” said Gary Ng, senior economist at Natixis in Hong Kong.

Ottawa and Mexico City were relieved to hear that Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum agreed to tighten border controls in response to Donald Trump’s demand to fight illegal migration and drug smuggling. This allowed for a 30-day postponement of the 25% tariffs that were to take effect on Tuesday.

Canadian industry associations, which had feared supply chain disruptions, welcomed the temporary suspension.

“This is very encouraging news. We have a very integrated industry that benefits both countries,” said Chris Davidson, head of the Canadian Canola Growers Trade Group.

On Sunday, Trump hinted that the European Union could be his next target, but did not specify the timing of possible trade restrictions.

At an informal summit in Brussels on Monday, EU leaders said they were ready to respond to U.S. tariffs if they were imposed, but also called for reasonable dialogue and negotiations. The US remains the EU’s largest trading and investment partner.

Tags: China, USA