China didn’t hesitate to retaliate against President Donald Trump’s latest round of tariffs, introducing its own measures mere minutes after the U.S. policies went live. This rapid response underscores the intensifying trade tensions between the world’s two largest economies. Trump justified his tariffs by labeling China, Canada, and Mexico as “extraordinary threats” due to their alleged roles in facilitating illegal immigration and drug trafficking, particularly fentanyl. Yet, China countered by accusing the U.S. of neglecting its own responsibilities while unfairly targeting Beijing.
Tariffs function as taxes on foreign goods, driving up their cost for consumers in the importing country. Although tariffs were once commonplace, advanced economies have largely abandoned them post-World War II because they typically result in reduced trade, higher consumer prices, and retaliatory actions—all dynamics evident in the current U.S.-China standoff. On February 4, 2024, Trump enacted a 25% tariff on imports from Canada and Mexico, with a 10% rate applied to Chinese goods. Energy exports from Canada were granted a reduced 10% tariff.
China’s Ministry of Finance unveiled plans to impose tariffs of 15% on U.S. coal and liquefied natural gas, along with a 10% tax on crude oil, farming equipment, and specific automobiles. These tariffs will take effect on February 10. Separately, China’s government initiated an anti-monopoly probe into Google, accusing the tech giant of violating local laws. Export restrictions were also imposed on vital materials like tellurium, molybdenum, tungsten, ruthenium, and ruthenium-based products, justified as essential for safeguarding national security.
Trump characterized the tariffs as a response to China’s intellectual property theft, forced technology transfers, and other exploitative behaviors. He labeled the situation a “national emergency,” asserting that illegal immigration and drug smuggling from China, Canada, and Mexico endanger the U.S. At a GOP gathering in Florida, Trump vowed to replace federal income taxes with tariffs on foreign imports. As part of negotiations, he agreed to postpone tariffs on Canadian and Mexican goods in exchange for enhanced border security commitments from both countries.
