Just moments after President Donald Trump’s tariffs came into force, China struck back with its own countermeasures, marking a sharp escalation in the trade war between the two global powers. Trump’s decision to impose tariffs on Chinese imports was framed as a response to what he deemed an “extraordinary threat” posed by illegal immigration and drug trafficking, especially fentanyl. However, China hit back, accusing the U.S. of deflecting blame for its own shortcomings while unfairly targeting Beijing.
Tariffs are essentially taxes on foreign goods, which make them pricier for consumers in the importing nation. Once a staple of international trade, tariffs have fallen out of favor among advanced economies since World War II because they often lead to decreased trade, inflated consumer costs, and retaliatory measures—precisely the scenario unfolding today. On February 4, 2024, Trump rolled out a 25% tariff on imports from Canada and Mexico, coupled with a 10% levy on Chinese goods. Energy exports from Canada were subjected to a lower 10% rate.
China’s Ministry of Finance announced plans to impose tariffs of 15% on U.S. coal and liquefied natural gas, as well as a 10% duty on crude oil, farming equipment, and certain vehicles. These measures will come into effect on February 10. Additionally, China’s State Administration for Market Regulation launched an investigation into Google, alleging violations of the country’s Anti-Monopoly Law. Export restrictions were also placed on strategic materials like tellurium, molybdenum, tungsten, ruthenium, and ruthenium-related products, justified as necessary to protect national security.
Trump described the tariffs as a means to address China’s intellectual property theft, forced technology transfers, and other unfair practices. He declared the situation a “national emergency,” claiming that illegal immigration and drug smuggling from China, Canada, and Mexico jeopardize the U.S. During a GOP retreat in Florida, Trump proposed eliminating federal income taxes in favor of tariffs on foreign imports. To delay tariffs on Canadian and Mexican goods, he brokered deals for increased border security cooperation from both nations.
