The People’s Republic of China announced Tuesday that it retaliated against the United States with tariffs on specific U.S. imports. China’s decision came after President Donald Trump imposed a 10% tariff on Chinese products imported into the U.S., which went into effect at 12:01 a.m. on Tuesday.
The Ministry of Finance of the People’s Republic of China announced early Tuesday that it would impose a 10% tariff on crude oil imports from the U.S., agricultural machinery, and certain cars and pickup trucks. An additional 15% tariff would be placed on coal and liquefied natural gas imports from the U.S. Both tariffs will go into effect on February 10.
“The U.S.’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization,” read the notice from China’s finance ministry. “It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the U.S.”
China also announced it was investigating Google for potentially violating its anti-monopoly law. Depending on the results of the investigation, the tech giant could face several sanctions from China for its alleged infractions. Additionally, CNBC reported that China imposed export controls on several essential minerals, such as molybdenum, ruthenium, tellurium, and tungsten.
Despite the economic retaliations, China’s actions are modest compared to the U.S. tariffs. It is considered a measured response that allows the communist country flexibility to avoid escalation while also saving face for its citizens.
The country’s tariff response to the U.S. should be considered a “symbolic move for now,” Louise Loo, an economist at Oxford Economics, told CNBC.
“These moves are warnings that China intends to harm U.S. interests if need be but still give China the option to back down,” said Julian Evans Pritchard, head of China economics at Capital Economics.
“The measures are fairly modest, at least relative to U.S. moves, and have been calibrated to send a message to the U.S.,” Pritchard said.
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Meanwhile, Loo cautioned about an impending trade war between China and the U.S. She said both countries were “clearly in the early stage” of such a conflict and expected both countries to impose more tariffs.
She speculated that such an escalation between the two countries was “a very high likelihood.”