Beijing has responded to recent US tariff announcements with measured countermeasures, signaling both resistance and openness to negotiation. The Chinese government announced plans to implement a 15% tariff on coal and liquefied natural gas, alongside a 10% tariff on crude oil, agricultural machinery, and large-engine cars imported from the US, effective February 10.
The timing appears strategic, allowing room for diplomatic engagement before implementation. A planned call between the two leaders this week, confirmed by the White House, suggests potential for dialogue despite the escalating tensions.
China’s response appears calculated, targeting specific sectors rather than matching Trump’s broader 10% levy on all Chinese imports. The impact on US natural gas exports may be limited, as China represents only 2.3% of America’s global LNG exports, while its major vehicle imports come primarily from Europe and Japan.
The current situation echoes previous US-China trade relations under Trump, which began cordially before deteriorating. Recent positive exchanges, including Xi’s high-level representation at Trump’s inauguration and potential cooperation on Ukraine, suggest both sides may prefer avoiding immediate confrontation.
However, significant challenges remain. China’s position has strengthened since previous trade disputes, now serving as the primary trade partner for over 120 countries. Its reduced dependence on trade, with imports and exports now representing 37% of GDP compared to 60% in the early 2000s, may provide greater resilience against tariff pressures.
The previous trade war (2018-2020) ended with China agreeing to purchase an additional $200 billion in US goods annually, though Covid-19 disrupted this agreement. The current trade deficit stands at $361 billion, according to Chinese customs data.
China faces strategic limitations in its response options, as it exports nearly four times more to the US than it imports. This imbalance previously led China to exhaust its tariff options, suggesting it may need to consider alternative measures if tensions escalate.
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