China has announced a fresh wave of tariffs on US energy, vehicles, and equipment, intensifying the ongoing trade war between the world’s two largest economies. This move comes in response to sweeping measures implemented by US President Donald Trump against key trade partners, including Canada and Mexico. The latest tariffs include a 10% increase on Chinese imports into the US, adding to existing duties.
China’s Countermeasures
In a swift response, Beijing imposed a 15% tariff on US coal and liquefied natural gas (LNG), while crude oil, agricultural machinery, large-engine vehicles, and pickup trucks will face 10% levies. These tariffs target a significant sector of US exports, as China is a major consumer of American energy products. According to Beijing customs data, China imported over $7 billion worth of oil, coal, and LNG from the US last year. However, this is overshadowed by China’s energy imports from Russia, which amounted to $94 billion in the same period.
WTO Complaint and Additional Trade Actions
Beijing justified the move as a necessary response to Washington’s unilateral tariff hike, arguing that it violates World Trade Organization (WTO) regulations and disrupts normal economic and trade relations. In response, China has vowed to file a formal complaint with the WTO over what it describes as “malicious” levies imposed by the US.
Additionally, China launched a probe into US tech giant Google and added US fashion conglomerate PVH Corp.—owner of Tommy Hilfiger and Calvin Klein—along with biotech leader Illumina to its “unreliable entities” list. Furthermore, Beijing introduced new export controls on key industrial metals such as tungsten, tellurium, bismuth, and molybdenum, materials essential to various manufacturing industries.
Analysts Weigh In
Market analysts suggest that China’s response has been measured. “The retaliation is not aggressive, as China is selectively targeting US products instead of imposing broad-based tariffs,” said Zhang Zhiwei of Pinpoint Asset Management. “This is likely just the beginning of a prolonged negotiation process between the two countries.”
US-Canada-Mexico Trade Developments
While tensions between the US and China remain high, President Trump has also targeted Canada and Mexico with trade measures, citing their failure to curb illegal immigration and drug trafficking, particularly fentanyl. However, diplomatic negotiations have led to temporary pauses in some of these tariffs.
Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau both struck last-minute agreements with Trump to enhance border security and prevent further levies. As part of the agreement, Mexico committed to deploying 10,000 troops to its northern border, while Canada agreed to increase security measures and crack down on money laundering related to drug trafficking.
Market Reactions and Political Fallout
Asian stock markets initially surged on news of the US pausing tariffs on Mexico and Canada, but optimism faded as China’s countermeasures were announced. Concerns over a full-scale trade war continue to unsettle global markets.
Meanwhile, the political landscape in Canada has been shaken by Trump’s trade policies. Facing mounting pressure, Trudeau recently announced his resignation, prompting early elections in April. Anti-US sentiment in Canada has also intensified, with citizens boycotting American goods, canceling trips to the US, and Ontario blocking US companies from bidding on government contracts. The province even scrapped a deal with Elon Musk’s Starlink, a close Trump ally.
Conclusion
While Trump has framed these tariffs as a means to combat illegal drug flows rather than a trade dispute, tensions with China and other trade partners are escalating. With Beijing firmly pushing back and global markets on edge, the US-China trade war shows no signs of abating anytime soon.
