China has fought back against President Trump.
In a series of policy announcements from Beijing on Friday evening, China, which includes a 34% ship-on-ship tariff, indicated that Trump has no intention of retreating in the trade war that he began this week with his own sudden tariffs on imports from around the world.
China's Treasury Ministry said it coincided with Trump's plan on a 34% tariff on goods from China and a 34% tariff on imports from the US.
Separately, the Chinese Commerce Department added 11 American companies to its list of “unreliable entities,” saying it essentially hinders business in China and business with Chinese companies. The province has imposed a licensing system to limit the export of seven rare earth elements that have been mined and processed almost exclusively in China, from electric vehicles to smart bombs.
The Commerce Department also announced that it has launched two trade investigations into the US export of medical imaging equipment, one of the few manufacturing categories that keeps the US competitive.
China's general customs administration said it would halt imports of chicken from the five largest exporters of American agricultural goods and sorghum imports.
The new tariffs will hit less items than President Trump's tariffs, simply because they sell to far more US than China buys. Last year, China purchased $147.8 billion worth of American semiconductors, fossil fuels, agricultural products and other products. It sold $426.9 billion worth of smartphones, furniture, toys and many other products to the United States.
China is the second largest import source in the United States after Mexico and the third largest export market after Canada and Mexico.
But while President Trump's tariffs exempt imports of several large categories, such as semiconductors and drugs, there is no exemption from China's tariffs.
Beijing's actions have led to a sharp decline in the futures market for American stocks. This shows Wall Street could drop sharply after recording the worst day's results since 2020.
China's Treasury Ministry has issued a statement strongly criticizing Trump's tariffs. “This US practice is not in line with international trade rules, but seriously undermines China's legitimate rights and interests, and is a typical unilateral bullying practice,” the ministry said.
China's tariffs are scheduled to come into effect next Thursday, 12 hours after US tariffs become effective.
Jude Blanchett, director of the Land China Research Center, said China's strong response was “inevitable” after Trump introduced him to his cleaning fees.
“Beijing can no longer maintain the fiction that diplomatic involvement with the Trump administration would hamper a full-scale trade war,” Blanchett said. “Despite the White House's warnings of retaliation, the total tariffs imposed on China are now so important that Beijing has little reason to exercise restraint.”
The Escalator Cycle is also quickly bleaking the hopes of a summit between Trump and China's top leader Xi Jinping. Xi's aide is cautious about scheduling meetings between the two men, unless they can resolve a detailed agenda and the resolution of pending issues in advance.
Friday's measures emphasize China's retaliation toolbox freely. Beijing feels more prepared to survive today's trade war with the United States than during the first Trump administration, says Wang Dong, executive director of Peaking University's Institute for Global Cooperation and Understanding.
“If the Trump administration's hopes are to pressure China into the cave, it would be a non-starter,” he said.
Wang said Beijing is also betting that Trump is increasing pressure at home to ease some of his tariffs as it could harm the US economy.
“China is in a better position to win this round of trade friction,” Wang said.
Trump argues that sudden tariffs are essential to stop the long decline in U.S. global manufacturing share by protecting the American market from floods of imports. The White House also says tariffs are needed to maintain the rest of the US industrial capabilities to make ammunition in the event of a military conflict.
China's new export licensing system for rare earth metals could pose even more difficulties for American industries, and perhaps Europe and other companies. Previous introduction of other mineral export licenses has resulted in several months of delays as civil servants and businesses are aware of the new rules.
China imposed a two-month freeze on rare earth shipments to Japan in 2010 during a territorial dispute.
The Obama administration responded by asking the US to resume its own mining and processing of rare earths, which were primarily closed in the 1990s. However, 15 years after the Japanese embargo, mining resumed in the United States, but as rare earth refining has proven technically challenging, most ores are shipped to China to process them into valuable materials.
Claire Who A report from Seoul has been donated.
