Tariff wars: China's retaliatory levies on US take effect
What's the story
China has retaliated by imposing tariffs on around $14 billion worth of United States goods, entering a new phase in the trade dispute between the world's two largest economies.
The move comes in direct response to the US's recent imposition of 10% tariffs on all Chinese imports, which President Donald Trump called an "opening salvo" in a renewed trade offensive against China.
The new Chinese tariffs target key American exports with levies ranging from 10% to 15%.
Targeted approach
Key American exports targeted in China's retaliatory tariffs
The new Chinese tariffs, announced on February 4, specifically target key American exports.
This includes a 15% tariff on coal and liquefied natural gas (LNG) and a 10% tariff on crude oil, farm equipment, large-displacement vehicles, and pickup trucks.
Analysts suggest that this targeted approach by China may leave room for potential negotiations to avoid a broader trade war.
However, no agreement was reached by the deadline set for these negotiations.
Tech scrutiny
China initiates antitrust investigation into Google
Apart from the tariffs, China has also launched an antitrust investigation against US tech giant Google.
The Beijing authorities accuse Google of violating China's Anti-Monopoly Law.
This development further complicates the already strained trade ties between the two nations.
The International Monetary Fund (IMF) had warned such protectionist policies could disrupt supply chains and investment, stressing the need for constructive ways to resolve disagreements and enable trade.
Economic impact
Impact of China's additional tariffs on US imports
According to Capital Economics, China's additional tariffs will impact roughly $20 billion of annual imports.
This is a stark contrast to the $450 billion worth of Chinese goods now subject to US tariffs.
Zhang Yanshen from the China Center for International Economic Exchanges warned that "this could become a very, very bad situation," suggesting it might be just the beginning of this phase of the trade war.
Policy stance
Trump's stance on reciprocal tariffs and fentanyl issue
Meanwhile, President Trump has announced plans for "reciprocal tariffs" on other nations but didn't specify which countries might be targeted.
He hinted this could be part of a broader effort to address US budget concerns.
The Trump administration also wants China to address the flow of fentanyl into the US, although Beijing-based experts believe this issue can be easily resolved.