China Imposes Retaliatory Tariffs on 80 U.S. Goods Amid Trade War Round Two

 

U.S.-China trade tensions escalate with retaliatory tariffs and export controls / Reuters 

China has fired back in the ongoing trade war with the United States by announcing retaliatory tariffs on 80 U.S. goods and implementing export controls on key materials. This escalation comes after the U.S. imposed a 10% tariff on Chinese imports, marking the start of a heated second round in the trade conflict. However, there is a glimmer of hope for negotiations as both nations keep open the possibility of dialogue.

The Chinese government’s Tariff Policy Commission revealed on February 4 that starting February 10, additional tariffs of 15% will be imposed on eight categories of American products, including coal and liquefied natural gas (LNG). Seventy-two other categories, such as crude oil, agricultural machinery, and trucks, will be subject to a 10% tariff. These measures were announced shortly after the U.S. implemented its additional 10% tariff on Chinese imports.

In its statement, the Commission explained that the U.S. decision to impose unilateral tariffs violates World Trade Organization (WTO) regulations and undermines normal economic and trade cooperation between the two countries. The Chinese government emphasized that such actions will not solve the U.S.’s internal issues and accused Washington of damaging global trade norms.

In addition to the tariffs, China has introduced export restrictions on strategic materials such as tungsten, tellurium, bismuth, molybdenum, and indium—essential elements in the semiconductor and advanced technology sectors. The Ministry of Commerce also listed two prominent U.S. companies, PVH Corp (parent company of brands like Tommy Hilfiger and Calvin Klein) and biotech firm Illumina, as "unreliable entities." The ministry accused these firms of market discrimination against Chinese companies, citing unfair practices that disrupted normal trade relations.

Furthermore, China lodged a formal complaint with the WTO, opposing the U.S.’s latest round of tariffs. Adding fuel to the fire, the State Administration for Market Regulation launched an antitrust investigation into Google, which could complicate its operations in China and potentially strain partnerships with Chinese firms, according to The New York Times.

Despite these retaliatory measures, analysts believe China is leaving room for negotiation. By setting February 10 as the start date for the tariffs, Beijing seems to signal its willingness to engage in talks. U.S. President Donald Trump also hinted at the possibility of discussions, stating on February 3 that he would speak with Chinese President Xi Jinping within 24 hours.

Speculation has arisen about a potential revival of the 2020 "Phase One" trade agreement, which was worth $200 billion and included commitments on currency stabilization and agricultural purchases. According to The Wall Street Journal, China might offer to resume the deal while refraining from devaluing the yuan, signaling a willingness to ease tensions.

However, analysts caution that the U.S.-China dynamic differs from Washington’s recent negotiations with Canada and Mexico, where temporary compromises were reached regarding tariffs and immigration issues. Gary Ng, a senior economist at investment bank Natixis, noted that China faces unique challenges. “Unlike Canada and Mexico, China is unlikely to meet Trump’s demands quickly. Optimism about a swift resolution remains uncertain,” Ng said.

As the world watches this high-stakes trade war unfold, it is clear that the implications will extend far beyond the two nations involved. The conflict not only affects global supply chains and market stability but also tests the resilience of international trade norms. Whether the upcoming negotiations will yield a breakthrough or deepen the divide remains to be seen.