Five ways in which China is returning the United States rates

The commercial war between the two largest economies in the world has intensified after China responded against the introduction of tariffs by the United States with its own measures.

Beijing has proposed to address specific US assets with retaliation taxes, among other measures, after 10% of the rate introduced by President Donald Trump over all Chinese imports to the United States.

Somehow, this last Tit-For-Tat is not new and is based on the long commercial dispute between nations, and tariffs have already been imposed and threatened in several goods since 2018.

Trump has said he plans to talk to Chinese President Xi Jinping, so he could still reach an agreement. But if China continues its response on February 10 as planned, what could be the impact?

Part of China’s countermeasures to Trump’s rates is to announce own import taxes in US coal and liquefied natural gas (LNG) of 10%, and a 15% charge on crude oil.

Beijing’s response means that companies that wish to import fossil fuels from the United States would have to pay the tax to do so.

China is the world’s largest coal importer, but it obtains most Indonesia, although Russia, Australia and Mongolia are also among its suppliers.

When it comes to the United States, China has increased LNG imports in the country, with almost double 2018 levels, according to Chinese customs data.

But its general fossil fuel trade is modest, with US imports that represent only 1.7% of China’s total crude oil purchased abroad in 2023. This suggests that China does not depend on the United States and, therefore, impact of rates on their economy could be minimal.

Rebecca Harding, commercial economist and executive director of the Topla de Topla de Economic Topla, said that China could obtain more Russia supplies, where it has already been buying oil at low price, since the Kremlin seeks to finance its war effort.

On the other hand, the United States is the largest LNG exporter in the world, and also has many other clients, particularly the United Kingdom and the European Union.

In addition to fuel, China has slapped a 10% tariff on agricultural machinery, trucks and some large cars.

But China is not a great importer of American collection and obtains most of its cars in Europe and Japan, so a 10% tariff on an already small number of imports would not affect consumers too much.

In recent years, China has increased investments in agricultural machinery to improve production and reduce import dependence and to strengthen their food security.

Therefore, the introduction of tariffs on agricultural machinery could be another movement to try to boost the national industry.

Julian Evans-Pritchard, chief of economy of China de Consultancy Capital Economics, said that all tariff measures were “quite modest, at least in relation to US movements.”

It suggests that China’s directed assets represent around $ 20 billion (£ 16 billion) in annual imports, about 12% of total imports of China in the United States.

“This is far from the more than $ 450 billion of Chinese products to the white of the United States.”

But he said that China “had clearly been calibrated to try to send a message to the United States (and the domestic public) without inflicting too much damage.”

Chinese authorities have also announced some non -tariff measures, one of which is an investigation against monopoly on the United States technological giant, Google.

It is not clear to what the investigation will imply, but for the context, Google’s search services have been blocked in China since 2010.

The company still has a certain commercial presence in the country by providing applications and games to Chinese markets working with local developers.

But China only generates approximately 1% of Google’s global sales, which suggests that if you cut the ties completely with the country, it would not be much worse.

China has added PVH, the American company owner of the designer Calvin Klein and Tommy Hilfiger brands, to their so -called “unreliable entity” list and accused them of “discriminatory measures against Chinese companies.”

The list, which has other US companies, was created in 2020 by Beijing in the middle of the warming of commercial tensions.

For Calvin Klein and Tommy Hilfiger, being on China’s list will make it more difficult to do business in the country. They can face sanctions, including fines and the work visas of their revoked foreign employees.

The regulators will also go to the factories of the companies to investigate the operations, according to Andreas Schotter, international business professor at the Western University of Ontario, Canada.

The United States has its own “entity list”, which prohibits certain organizations from buying products from US companies without Washington’s approval.

“China is returning the same way as President Trump is accusing Chinese companies. All this is part of the decoupling promoted by the United States and China,” added Professor Schotter.

Although tariffs have been placed in companies that wish to import goods from abroad, China has also imposed export controls to 25 rare metals.

Some of the metals are key components for many electrical products and military equipment.

China has dominated the ability to refine such metals and produced almost 90% of global refined production.

The restricted list includes tungsten, which is difficult to obtain and a crucial material for the aerospace industry.

While there are exports restrictions, Mr. Evans-Pritchard of Economics Capital, said it was remarkable that the critical metals that China import from the United States, which are used to make high-end chips, semiconductor machinery, pharmaceutical products and Aerospace equipment any measure.

The experience of the previous restrictions suggests that exports will be launched sharply as companies rush licenses, a process that has been for several weeks.

When it comes to the impact of restrictions, it seems that the United States has a plan. On Monday, Trump said he wanted Ukraine to guarantee the supply of more rare earth metals in exchange for $ 300 billion support in his fight against Russia.