China and the United States have further intensified their trade dispute, imposing a series of tit-for-tat tariffs and trade restrictions that could have significant global economic implications. China recently announced export controls on 25 rare metals, crucial for various electrical products and military equipment, while the US has imposed a 10% tariff on American crude oil, agricultural machinery, and large-engine cars. This clash underscores the deepening rift between the world's two largest economies.
The US tariffs on Chinese products, which took effect on February 4, include a comprehensive 10% duty on all imports. In retaliation, China will implement a 15% border tax on imports of US coal and liquefied natural gas starting February 10. China's actions are part of a broader strategy to counter the growing pressure from Washington. Moreover, amidst allegations from the US regarding China's role in the synthetic opioid fentanyl trade, China has rebuked these claims as "unfounded and false."
While trade tensions mount, the US Postal Service (USPS) has temporarily halted package acceptance from China but later reversed its decision. In a separate move, the US suspended tariffs on small packages from China starting February 4, highlighting the complex nature of these ongoing negotiations.
Adding another layer to the conflict, China has launched an anti-monopoly investigation into Google, a move that could further strain relations with the US. In response to escalating tensions, Beijing has placed PVH, the owner of renowned designer brands Calvin Klein and Tommy Hilfiger, on its "unreliable entity" list. This designation indicates entities perceived as jeopardizing China's national sovereignty or security.
President Donald Trump has threatened to expand tariffs to include imports from additional trading partners, including the European Union (EU). He has repeatedly criticized the EU for its high tariffs on American cars compared to US levies. In his words:
"I'll be announcing that, next week, reciprocal trade, so that we're treated evenly with other countries." – Donald Trump
In North America, the US has imposed 25% tariffs on goods from Mexico and Canada but has paused these duties for a month while negotiations proceed. Meanwhile, China's reciprocal import taxes on certain American goods are set to take effect on Monday.
The ongoing tariff battle has also reached international forums, with the US lodging complaints against China's trade practices at the World Trade Organization (WTO). In response, China has filed a complaint against US import taxes. President Trump reassured that:
"adequate systems are in place to fully and expediently process and collect tariff revenue" – Donald Trump