China's countermeasures seen as inevitable

U.S. economists and trade groups say that additional tariffs by China were an inevitable response to the 10 percent tariff imposed by U.S. President Donald Trump on Chinese imports that came into effect on Tuesday. However, most U.S. industries do not want to see a protracted trade war.

The tariffs by China, scheduled to start on Feb 10, will include a 15 percent tax on some coal and liquefied natural gas, and a 10 percent tariff on crude oil and agricultural machinery, China's Ministry of Finance said.

Thomas Fullerton, an economics professor at the University of Texas at El Paso, told China Daily that "some (U.S.) companies may … be affected by government actions taken in Beijing".

Both Trump's 10 percent tariff on imported goods from China and China's countermeasures on U.S. goods will likely mean that businesses and consumers will have to pay higher prices as a result amid tight economic times, experts say.

It is not the first time that China has taken countermeasures. In 2018, the Trump administration enacted tariffs ranging between 10 percent and 50 percent on approximately $283 billion of Chinese imports.

In response, China placed a 25 percent tariff on $50 billion worth of U.S. goods in 2018, including pork and soybeans. That cost U.S. agricultural producers around $27 billion in lost export revenue from 2018 to 2019, the U.S. Department of Agriculture determined. By 2019, a trade agreement was reached.

In a bid to prevent another tit-for-tat trade war, the farming industry is paying close attention to the actions of both sides and seeks a resolution.

"Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation," American Farm Bureau Federation President Zippy Duvall said in a statement.

Mary Lovely, a professor emeritus of economics at Syracuse University and a senior fellow at the Peterson Institute for International Economics, is more optimistic about how the U.S. agricultural industry could cope with a second trade war.

"In 2017/2018 … U.S. agriculture was negatively affected. … If we have another trade war, however, the agriculture industry will be less affected simply because a lower share of U.S. agricultural exports now is sold to China."

New controls

The U.S. exports relatively little coal to China — 11.6 million metric tons in 2024, according to the West Virginia Coal Association, but the industry said it is monitoring developments.

The Ministry of Commerce and China's customs administration also plans to implement new export controls on more than two dozen metal products, such as tungsten, a critical mineral used in industrial and defense applications, and tellurium, used in solar cells. It will also investigate Google over allegations that it flouted antitrust laws.

Two firms, biotech company Illumina and fashion retailer PVH, which owns Calvin Klein and Tommy Hilfiger, will be put on its unreliable entities list after the ministry said it "violated normal market trading principles".

The initial tariffs announced by China are limited, representing $20 billion worth of annual imports, or around 12 percent of China's total imports from the U.S., research firm Capital Economics estimated.

Several U.S. industries that work in tandem with China are watching closely to see if other products are hit with levies that could impact them.

In 2023, the top Chinese imports into the U.S. included $66.7 billion worth of smartphones, $53.1 billion in computers and accessories, and around $42 billion in electric and industrial equipment.

Tiff any Smith, the National Foreign Trade Council's vice-president of global trade policy, told China Daily that tariffs will not resolve the "complicated economic challenges" that exist between the world's two largest economies.