Iran (IMNA) - On Tuesday, China announced tariffs of 15% on U.S. coal and liquefied natural gas (LNG), and 10% on crude oil, agricultural equipment, and certain automobiles. These tariffs will take effect on February 10, following Trump's implementation of a 10% tariff on all Chinese imports that began at 12:01 a.m. ET on the same day.
In addition to the tariffs, China’s Commerce Ministry is launching an antitrust investigation into Google and has introduced export controls on critical minerals like tungsten and molybdenum, citing national security concerns. This move comes as Trump aims to penalize China for its failure to curb the flow of illicit drugs, including fentanyl, into the United States.
Despite a temporary pause in tariffs against Canada and Mexico, where Trump agreed to a 30-day moratorium in exchange for concessions related to border security, no such reprieve was extended to China. A White House spokesperson confirmed that Trump would not engage in talks with Chinese President Xi Jinping until later in the week.
The renewed trade tensions echo the brutal trade war initiated by Trump in 2018, which saw tit-for-tat tariffs disrupt global supply chains. Although China had previously agreed to increase its purchases of U.S. goods by $200 billion annually to resolve the trade war, this plan has been derailed by the COVID-19 pandemic, leading to a widening trade deficit of $361 billion.
Analysts predict that further tariffs are likely as the trade war is still in its early stages. Trump has warned that he may escalate tariffs unless China takes action against fentanyl trafficking. In response, China has labeled the drug crisis as an American issue and plans to challenge the U.S. tariffs at the World Trade Organization while keeping diplomatic channels open for potential negotiations.
The situation remains fluid as both countries navigate their economic strategies amidst rising tensions.
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