China’s Ministry of Commerce announced Feb. 4, a package of countermeasures targeting some U.S. economic goods exports to China just moments after U.S. President Donald Trump’s sweeping imposition of a 10% tariff on all Chinese goods exports to the United States went into effect this morning.
The Chinese government stated that it will apply a 15% tariff on U.S. coal and liquefied natural gas (LNG) products exported to China, as well as a 10% tariff on crude oil, agricultural machinery, and large displacement cars, all of which would go into effect on Feb. 10. China also said that it will restrict its exports of five metals used in defense as well as other industries. At the same time, the Chinese government moved to open an antitrust probe into Google, and filed a complaint to the World Trade Organization, invoking its dispute settlement procedure.
The first part of China’s package represents a measured response to the United States. For example, China’s 15% tariff on U.S. LNG to China—the U.S. only exports 173,247 million cubic feet of LNG to China, so a Chinese tariff on it won’t affect a trade that is already so small. Likewise, China imported fewer than 110,000 cars from the U.S. last year, so a 10% Chinese tariff on “large displacement U.S. cars” won’t affect much trade (although General Motors may be hit a little by this tariff). It appears the Chinese are saying to the U.S., this is something China can do, let’s see if the U.S. and China can work out a deal.
