The ongoing trade conflict between the world's two largest economies has intensified as China retaliated against the US tariffs by imposing its own measures. Beijing has targeted specific American goods with retaliatory taxes in response to President Donald Trump's blanket 10% tariff on all Chinese imports to the US.
This back-and-forth escalation is part of the long-standing trade dispute between the two nations, involving tariffs imposed or threatened on various goods since 2018. President Trump has indicated his intention to discuss the situation with Chinese President Xi Jinping, leaving the possibility of a resolution open.
China's response includes imposing import taxes on US coal, liquefied natural gas (LNG) at 10%, and a 15% charge on crude oil. These measures would impact companies looking to import fossil fuels from the US by adding extra costs.
Although China is the world's largest coal importer, it predominantly sources from Indonesia, with Russia, Australia, and Mongolia as other key suppliers. Regarding LNG, China has been increasing imports from the US, showcasing a near doubling of volumes in 2018, according to Chinese customs data. However, overall fossil fuel trade with the US accounts for only 1.7% of China's total crude oil imports from abroad in 2023, indicating limited dependence on American imports.
Regarding tariffs on agricultural machinery, pick-up trucks, and some large cars, China's minimal reliance on US pick-ups, coupled with a majority of car imports from Europe and Japan, suggests a limited impact on consumers. The country's increasing investments in farm machinery could be part of a move to boost domestic industry.
The imposition of tariffs on specific goods by China is estimated to represent around 12% of the country's total imports from the US, significantly less than the extensive targeting by the US against Chinese goods. These measures are viewed as a strategic message without causing substantial harm.
In addition to tariffs, China has initiated non-tariff actions, including an anti-monopoly investigation into Google, a tech giant. Despite Google's restricted presence in China, the effects of this investigation remain uncertain.
Furthermore, China has included PVH, the American company owning Calvin Klein and Tommy Hilfiger, on its "unreliable entity" list due to alleged discriminatory measures against Chinese enterprises, impacting their business operations in China. This decision is part of Beijing's response to trade tensions and adds to the intricate trade dynamics between the two nations.