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18 Feb 2025 5:33
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  •   Home > News > International

    China retaliates with tariffs on US goods after Trump imposes new levies

    China has imposed targeted tariffs on US imports and put several companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Donald Trump.


    China has imposed targeted tariffs on US imports and put several companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Donald Trump.

    It was unclear when Mr Trump and Chinese President Xi Jinping would speak, a step seen as critical to potentially defusing the situation.

    Earlier on Tuesday, Mr Trump's trade adviser Peter Navarro said the two leaders would speak later in the day.

    Those remarks suggested to investors there was scope for China to receive a temporary reprieve as Mr Trump granted to Mexico and Canada on Monday, helping push stocks and oil prices higher.

    The Wall Street Journal, however, cited a US official saying the two presidents would not speak on Tuesday.

    Beijing's limited reply to Mr Trump's imposition of a 10 per cent tariff on all Chinese imports underscored the attempt by Chinese policymakers to engage Mr Trump in talks to avert an outright trade war between the world's two largest economies.

    Capital Economics, a UK-based research firm, estimated that China's additional tariffs would apply to about $20 billion US of annual imports, compared with the $450 billion US worth of Chinese goods subject to the Trump tariff that took effect on Tuesday.

    "The measures are fairly modest, at least relative to US moves, and have been calibrated to send a message to the US," Julian Evans-Pritchard, the firm's head of China Economics, said in a note.

    Mr Trump on Monday suspended his threat of 25 per cent tariffs on Mexico and Canada, agreeing to a 30-day pause in return for concessions on border and crime enforcement.

    Mr Trump suggested on Sunday that the European Union (EU) would be his next target for tariffs, but did not say when.

    Ursula von der Leyen, head of the EU's executive European Commission, said Brussels would be ready for tough negotiations but underlined the need to lay foundations for a stronger partnership with the EU's largest trade and investment partner.

    What is included in China's tariffs?

    China's new measures, announced as the US tariffs took effect, include a 15 per cent levy on US coal and LNG and 10 per cent for crude oil, farm equipment and a small number of trucks as well as big-engine sedans shipped to China from the United States.

    China also said it was starting an anti-monopoly investigation into Alphabet's Google.

    It put PVH, the holding company for brands including Calvin Klein, and US biotechnology company Illumina, on a list for potential sanctions.

    PVH said in a statement it was surprised and "deeply disappointed" by China's decision, adding it maintains strict compliance with all relevant laws, regulations and standards.

    "Illumina has a long-standing presence in China … Wherever Illumina operates, we comply with all laws and regulations," an Illumina spokesperson said in an email.

    Google declined to comment on the investigation.

    Export controls on some metals

    China said it was imposing export controls on some metals, including tungsten, that are critical for electronics, military equipment and solar panels.

    The 10 per cent duty China announced on electric trucks imported from the US could apply to Elon Musk's Cybertruck, a niche offering Tesla has been promoting in China.

    Tesla had no immediate comment.

    China's new tariffs will not take effect until Monday, giving Washington and Beijing time to try to seek a deal that Chinese policymakers have indicated they hope to reach with Mr Trump as China's domestic demand sputters.

    "The trade war is in the early stages so the likelihood of further tariffs is high," Oxford Economics said in a note as it downgraded its China economic growth forecast.

    Mr Trump said he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the US.

    China has called fentanyl America's problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, while leaving the door open for talks.

    The US is a relatively small source of crude oil for China, accounting for 1.7 per cent of its imports last year.

    Just over 5 per cent of China's LNG imports come from the US.

    There was relief in Ottawa and Mexico City after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement, pausing for 30 days 25 per cent US tariffs due to take effect on Tuesday.

    Outlook for Australian dollar

    "Just as Canada and Mexico announced retaliation to US tariffs, China is doing the same," AMP chief economist Shane Oliver said.

    "A one-month delay is possible with the Chinese tariffs if Trump and Xi talk and reach a deal but it's less likely than was the case with Canada and Mexico.

    Dr Oliver said the tariff story "has along way to go and this will continue to cause volatility in the Australian dollar and shares."

    InTouch Capital Markets Senior FX StrategistSean Callow says he was concerned the Australian dollar and shares could suffer further heavy falls.

    "But not only did the deadline for tariffs on China pass without a triumphant tweet about a deal, China was ready with its own tariffs on the US.

    "The Australian dollar looks set to suffer another round of collateral damage."

    © 2025 ABC Australian Broadcasting Corporation. All rights reserved

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