China Retaliates Against U.S. Tariffs

Context:

China declared new tariffs on US energy, autos and equipment as it aimed to hit back against President Trump’s fresh round of trade restrictions. It deepened a tariff battle that could involve new export controls, probes of American companies and retaliation in critical US agricultural markets.

Key Highlights:

China’s Retaliatory Tariffs

• Beijing’s Counterattack
  • Tariffs of 15% on the import of U.S. coal and liquefied natural gas (LNG).
  • Tariffs of 10% on crude oil, farm machinery, heavy vehicles, and pickup trucks.
  • The U.S. had earlier levied an additional 10% tariff on Chinese products.
  • The U.S. energy imports for China in 2024 were at a measly $7 billion, while its importation from Russia were a whopping $94 billion.
• Beijing’s Defense
  • China called the U.S. tariffs a “unilateral hike,” which was against WTO rules.
  • Beijing said it would lodge a complaint with the WTO over what it termed “malicious” levies.”
  • Experts say this is the beginning of long and protracted negotiations between the two nations.

Investigations against U.S. Companies  

• Google
  • The company is being probed on suspected violations of China’s Anti Monopoly Law.
  • Google’s search engine and other services are currently banned in the mainland of China.
• PVH Corp. & Illumina
  • Blacklisted by Beijing for “opposing” allegedly discriminatory practices of Chinese companies against Chinese companies.
  • PVH is an owner of such brands as Tommy Hilfiger and Calvin Klein, which currently are under the investigation for discrimination against Xinjiang cotton. 

China Increases Export Controls Over Key Metals

• Restrictions on exporting rare metals and chemicals like
  • Tungsten, tellurium, bismuth, molybdenum-all those necessary for industries
  • A latest in series of curbs that were enforced last year against exporting gallium and germanium-the two major semiconductors.

Trump’s Stand on Tariffs

• According to him, the main goal of such tariffs is the curb illegal immigration and drug smuggling.

Impact on India

• The ongoing trade war between the United States and China is expected to benefit India’s export sector, with government sources indicating optimism despite potential challenges.
• The escalation of the conflict between the two economic giants is likely to increase India’s trade opportunities with the US.