Following Trump Edict, China Hits Back With Tariffs of Its Own
- New 10-percent duties on China-made goods took effect, prompting China to retaliate with 10-percent to 15-percent duties on U.S. exports like LNG, coal, and machinery, impacting $20 billion worth of U.S. imports.
New 10-percent duties on China-made goods took effect in the wee hours of Tuesday morning, and Beijing was poised and ready to respond with a robust roster of countermeasures to the U.S. president’s tariff scheme.
President Donald Trump’s executive order, which fingered China for its role in America’s fentanyl crisis, prompted China to levy 10-percent to 15-percent retaliatory duties on U.S. exports like liquefied natural gas, coal, machinery used for farming and other products, which are slated to be implemented next Monday.
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Should they go through, China’s tariffs would impact about $20 billion worth of U.S. imports, while Trump’s new duties target $450 billion in Chinese goods.
President Xi Jinping’s government also took aim at America’s technology and defense sectors, cutting off or restricting access to certain China-mined critical minerals that are used in the production of weapons and clean energy infrastructure.
Chinese market regulators said they would additionally launch an antitrust investigation into Google, which, while blocked for use by the country’s internet browsers, could have adverse impacts on the Silicon Valley behemoth’s dealings with China-based firms.
On the apparel front, Beijing added Calvin Klein-owner PVH Corp to China’s unreliable entity list, saying the fashion firm “violated normal market-trading principles, terminated regular trade with Chinese companies, and adopted discriminatory measures against Chinese companies,” according to China’s Commerce Ministry. PVH responded, saying that it was “surprised and deeply disappointed” by the decision.
At a Politico event on Tuesday, Trump trade adviser Peter Navarro intimated that Xi and Trump had plans to hash out the actions by phone. Asked how American consumers and companies should understand the new tariffs, he said, “Let’s see what happens with the call today.”
However, by Tuesday afternoon, it seemed that the meeting was off. A White House official told the Wall Street Journal that the call had been postponed, meaning that a speedy resolution or deferral of duties (à la Colombia , Mexico and Canada ) is likely not in the cards for China.
Unlike other nations that recently found themselves in Trump’s tariff crosshairs, China is also contending with the loss of access to the de minimis trade exemption, an element of U.S. trade law that allows direct-to-consumer shipments worth $800 or less to enter the country duty free. In 2024, about 4 million packages entered the country daily using de minimis, and at least half of them originated in China.
While Trump’s executive order didn’t slam the door on the deluge of parcels from the likes of Shein , Temu and Alibaba, it did negate their duty-free access to the U.S. market—a central tenet of their business models and a key to their rise to prominence with American shoppers.
Questions about the viability of these seemingly untouchable e-conglomerates are already causing market upset; Temu parent company PDD Holdings saw shares plummet 5.9 percent Monday, though they rallied Tuesday, seeing 8.8-percent gains.
Temu and others like it have been gaming out the potential impacts of tariffs and changes to trade law for months, exploring new ways to bring in and store product aimed at American consumers—but it may not be enough.
“Temu’s efforts in ramping up its local warehouse/semi-managed model over the past year could help,” Citigroup analyst Alicia Yap wrote in a memo. But “the new tariffs will still have a negative read-through to Temu’s growth in 2025 and beyond.”
