In brief
As China responds to the escalating trade war with the US, this article explores five methods Beijing is using to push back and the potential implications for both economies.
China is stepping up its game in the ongoing trade battle with the US by retaliating against recent tariffs. After President Trump imposed a blanket 10% tariff on all Chinese imports, Beijing responded with its own countermeasures aimed at specific American products.1. **Fossil Fuels:** China has leveled import taxes on U.S. coal and liquefied natural gas (LNG)—10%, while crude oil faces a 15% tariff. Despite being the world’s largest coal importer, China's reliance on US fossil fuels is limited, suggesting minimal impact on its economy.2. **Automobile Tariffs:** Alongside fuels, a 10% tariff has been placed on agricultural machinery and large vehicles, such as pick-ups and trucks. However, since China predominantly sources cars from Europe and Japan, this measure is unlikely to heavily impact consumers.3. **Tech Investigations:** Adding a twist, China's authorities have opened an anti-monopoly probe into Google, which has been blocked in China since 2010. Given Google's limited sales in China, this move highlights Beijing's focus on US tech giants.4. **"Unreliable Entities" List:** Fashion brands like Calvin Klein, owned by American company PVH, have been added to China's "unreliable entities" list, facing increased scrutiny and sanctions for perceived discrimination against Chinese firms.5. **Rare Metals Export Controls:** China imposed restrictions on 25 rare metals crucial for various industries, including electronics and defense. Amid these measures, the US is exploring alternative sources to maintain supply chains.This strategic punchback illustrates China's attempt to assert power without severely damaging its economic foundations. As both countries contemplate negotiations, the trade war remains a significant chapter in global economic affairs.
