New Tariff Measures of the Trump Administration and China's Responses

 

 

Since taking office, President Donald Trump has become a center of global attention, particularly following his February 1 announcement of new tariff measures on imports from Canada, Mexico, and China.

 

The pressure of a potential trade war made both Canada and Mexico enter negotiations with the United States. In response, Canadian Prime Minister Justin Trudeau agreed to strengthen police and military forces along the U.S. border, while initiating joint efforts to combat organized crime, fentanyl smuggling, and money laundering. On Mexico’s side, President Claudia Sheinbaum committed to reinforcing the northern border by deploying 10,000 members of the National Guard to curb illegal immigration and drug trafficking. In exchange, on February 3, President Trump announced a temporary suspension of tariffs on Mexico and Canada for at least 30 days.

 

 

As for China, the country undertook diplomatic efforts to ease tensions with the United States and avoid the onset of a second U.S.-China trade war in the aftermath of the U.S. presidential election. These efforts included: (i) the unprecedented attendance of a high-ranking Chinese official, Vice President Han Zheng, at the U.S. presidential inauguration; and (ii) the facilitation of phone calls between President Xi Jinping and Foreign Minister Wang Yi with President Trump and Secretary of State Marco Rubio on January 17 and 24.

 

However, following the imposition of a 10% tariff by the United States, China filed a formal complaint with the World Trade Organization (WTO). In parallel, Beijing implemented countermeasures to safeguard its interests, such as announcing retaliatory actions targeting U.S. companies. These included antitrust investigations against Google, and the addition of biotech firm Illumina and PVH Corp. to its “unreliable entities list.”China also introduced new trade barriers of its own, including: (i) tightening export controls on several rare metals, such as molybdenum and tungsten — materials essential to the production of light bulbs, ammunition, and semiconductors; (ii) imposing a 15% tariff on U.S. coal and liquefied natural gas (LNG), and a 10% tariff on crude oil, agricultural machinery, pickup trucks, and large-engine vehicles.

 

These moves suggest that China had been preparing for such tariff actions by the Trump administration, especially in areas where the U.S. heavily depends on Chinese exports, such as rare earth materials. However, analysts suggest that China’s retaliatory measures were largely symbolic in nature, aimed at deterring Washington from imposing even harsher tariffs in the future.

 

According to scholar Dylan Loh of Nanyang Technological University in Singapore, China has outlined contingency plans to counter U.S. actions, but these measures are likely limited in scope to avoid triggering further sanctions from the United States.

 

Meanwhile, Professor Wang Yiwei of Renmin University in China observed that although structural challenges persist in U.S.-China relations, Trump’s presidency may paradoxically offer space for renewed dialogue. He emphasized that both countries are still leaving the door open to negotiations as a means to resolve their economic and trade differences, thereby avoiding further escalation.

 

Despite its strong countermeasures, China has consistently demonstrated a desire to resolve disputes through dialogue on the basis of equality and mutual respect. This signals that Beijing does not seek to escalate tensions into a full-scale trade war, but rather aims to find a stable and long-term solution for the bilateral economic relationship in this new geopolitical context.