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Zhao Ziwen

Observers said China’s retaliatory moves in response to US tariffs showed Beijing’s readiness to face escalating trade tensions along with its desire to achieve more at the negotiation table.
Analysts said that compared with the immediate relief the US granted to its neighbours by delaying tariffs on Mexican and Canadian goods, Washington might take a hardline approach to Beijing, its biggest rival.
On Tuesday, Beijing announced it would impose additional tariffs of 10 to 15 per cent on some US products such as coal, petroleum, agricultural equipment and high-emission vehicles from February 10.
Separately, it launched an anti-monopoly investigation into US tech giant Google and put American clothing company PVH, which owns Calvin Klein, and biotechnology company Illumina on its unreliable entity list.
The measures were announced after US tariffs of 10 per cent on Chinese products took effect earlier on Tuesday.
The US levies on Chinese goods came into effect after US President Donald Trump suspended 25 per cent tariffs on Canada and Mexico on Monday.
Julien Chaisse, a professor of international economic law at City University of Hong Kong (CityU) School of Law, said China’s measures might also serve as “an implicit invitation” for negotiation.
“These measures are significant but measured, aimed at demonstrating China’s capacity to retaliate while maintaining strategic flexibility,” he said.
“By targeting key US exports, including [liquefied natural gas], crude oil and certain automobiles, China aims to inflict economic costs selectively.”


In another move to hit the US defence industry and hi-tech production, China implemented fresh export controls on key minerals, adding tungsten, tellurium, bismuth, molybdenum, and indium to the export control list.
China dominates the production and refining of several of these minerals, which have applications ranging from producing solar panels and armour-piercing shells to atomic research.
But Chaisse said China had chosen to avoid more systemic economic countermeasures such as restrictions on critical US supply chains or financial market interventions, indicating its priority remained negotiation rather than confrontation.
He said this also showed that Beijing’s countermeasures aimed to “keep diplomatic channels open”.
Da Wei, director of Tsinghua University’s Centre for International Security and Strategy in Beijing, said China’s moves were “measured and restrained”, as US coal and liquefied natural gas accounted for only 1 per cent and 3 per cent of China’s total imports, respectively.
Beijing’s retaliatory measures came ahead of a possible call between Trump and his Chinese counterpart Xi Jinping in the coming days.
Both Canada and Mexico announced retaliatory duties on American goods after Trump announced tariffs on their goods on Saturday.
Canada responded with tariffs of 25 per cent on American imports worth C$30 billion (US$20.5 billion) starting from Tuesday.
In response, Trump suspended tariffs on Canadian and Mexican products for 30 days, but the 10 per cent additional tariff on Chinese goods remains.
Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis and senior fellow at the Brussels-based think-tank Bruegel, said Trump’s surprising reaction to Canada and Mexico might influence China’s decision-makers.
“I think China is reacting to Trump’s hesitance,” she said, adding that Chinese leaders might expect Trump to hesitate because Canada and Mexico reacted harshly to the tariffs.
However, analysts said Trump was likely to retaliate more forcefully against China compared to his treatment of Canada and Mexico.
Within the United States, “there is a big difference between the China factor with Canada and Mexico, especially on security and strategic issues”, said Zhu Feng, executive dean of Nanjing University’s School of International Studies.
Beijing has long called for dialogue to solve trade disputes and warned that there would be no winners in tariff wars.
But uncertainties linger because of tense bilateral relations, a fierce tech and military rivalry between the US and China, and Trump’s unpredictability.
The 10 per cent tariffs might just be the beginning as Trump threatened to impose tariffs of 60 per cent on Chinese products during his campaign.
China has stepped up countermeasures such as tightening export controls on strategic minerals and drones while diversifying to reduce reliance on American imports and technology.
Joerg Wuttke, partner at DGA Albright Stonebridge Group in Washington and former president of the European Union Chamber of Commerce in China, said China had considerable influence over the US economy.
“Trump has to show action on China as he promised this to his voters during the campaign,” he said.
“He might start ‘low’ to test their reaction. But he has to be carefully calibrating the tariffs as 60 per cent on nearly US$500 billion of imports would lead to inflation and a supply chain shock.”
According to an analysis by Warwick McKibbin and Marcus Noland, economists at the Peterson Institute for International Economics, a 10 per cent additional tariff would shrink the US economy by US$55 billion when accounting for retaliation by China.
Brian Wong, a fellow at the University of Hong Kong’s Centre on Contemporary China and the World, agreed that the US had reasons to show restraint due to China’s growing trade power.
Wong noted that China was an export-dependent economy with a positive trade surplus, giving it the ability to impose tariffs on foreign goods without facing inflation risks as severe as those in the US.
“China has more economic and political bandwidth to stomach the repercussions of escalatory tariffs,” Wong said.
Additional reporting by Enoch Wong


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