By Brian Swint
President Donald Trump's decision to impose additional 10% tariffs on goods from China provoked an immediate response from the world's second-largest economy.
The new levies took effect overnight, prompting China to announce import taxes of 15% on U.S. crude oil, machinery, and some cars, as well as a 10% increase of tariffs on coal and liquified natural gas. In a move that wasn't explicitly tied to Trump's tariffs, China also said it was starting an antitrust probe into Alphabet's Google, the internet search engine.
Beijing added two U.S. companies to its unreliable entity list -- Calvin Klein owner PVH Corp. and biotechnology company Illumina.
China also announced export controls on scarce elements that are critical for making electronics, including tungsten, tellurium, bismith, molybdenum and indium. China is a big miner of these materials.
The moves follow a last minute delay to Trump's plans to raise taxes on imports from Mexico and Canada. That sparked a relief rally in stocks, which had fallen sharply on concern that the new tariffs would fan inflation and hamper economic growth. The question now is whether Trump and China can work out a similar deal to prevent the trade war from escalating further.
"For the most part, these moves are warnings that China intends to harm U.S. interests if need be but still give China the option to back down," said Julian Evans-Pritchard, head of China economics at Capital Economics. "The tariffs could be postponed or cancelled before they come into effect" on Feb. 10.
Evans-Pritchard also noted that the Chinese retaliation only targets about $20 billion worth of imports, compared to the $450 billion in Chinese wares that Trump has targeted. What's more, China didn't raise tariffs on strategic goods such as semiconductors and pharmaceuticals.
Write to Brian Swint at brian.swint@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 04, 2025 05:31 ET (10:31 GMT)
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