China Imposes Retaliatory Tariffs on the U.S., Marking the Resumption of the U.S.-China Trade War

China's response to U.S. tariffs brings new tensions to global trade relations / Reuters

In the early hours of February 10, 2025, China began enforcing retaliatory tariffs in response to the United States' decision to increase tariffs on Chinese goods by 10%. This marks the renewed escalation of the ongoing U.S.-China trade war, which had seen some resolution under President Donald Trump but is now reigniting under the current administration.

The U.S. had previously imposed an additional 10% tariff on Chinese imports, citing issues like China's insufficient response to the fentanyl crisis. In retaliation, China announced a series of measures, including tariffs on U.S. products such as coal and liquefied natural gas (LNG), with tariffs ranging from 10% to 15%. Additionally, China imposed sanctions on a variety of American products, including oil, agricultural machinery, and pickup trucks.

Alongside these economic measures, China also began investigating major U.S. tech companies for alleged violations of antitrust laws, particularly targeting Google, and introduced export controls on minerals like tungsten and tellurium. Other significant moves included sanctions on American fashion giant PVH Group and biotech company Illumina, signaling China's broader strategy to challenge the U.S. across multiple industries.

Although China's countermeasures were diverse, experts noted that they were not as severe in terms of overall impact as the sweeping tariffs the U.S. had imposed on all Chinese imports. Despite this, China made efforts to engage diplomatically. Leading up to the tariff imposition, Chinese media suggested that both sides might reach a deal to avoid further escalation, with some analysts speculating that negotiations could still occur before the deadline.

However, U.S. President Trump, known for his business-oriented decision-making, maintained a firm stance on the tariffs, opting not to rush negotiations with China. His administration indicated willingness to delay tariff implementation with Canada and Mexico but chose not to expedite talks with China. In contrast, China expressed its willingness to resolve disputes through dialogue, but has been careful about engaging in high-level talks, with no indication of immediate communication between the two countries.

There are indications that Chinese President Xi Jinping is cautious about engaging in hasty discussions with Trump, with Hong Kong's South China Morning Post suggesting that Xi's team is reluctant to rush into phone calls with the U.S. President. While Trump seeks a swift resolution, Chinese officials appear more cautious, preferring to first outline the agenda for any potential high-level communication.

Despite these differences in approach, both sides have reiterated their intention to negotiate. The shared understanding that the trade war cannot continue indefinitely raises hopes that an agreement could be reached in some form. This isn't the first time such negotiations have occurred; in 2020, the U.S. and China reached the "Phase One Trade Agreement" after 18 months of intense trade conflict. This agreement led China to commit to increasing U.S. product purchases by $200 billion over two years, while the U.S. promised not to raise tariffs further in exchange.

In the current context, the U.S.-China trade war is once again at a critical juncture. With both nations keen to avoid a prolonged conflict, the world is watching closely for signs of a potential resolution, whether through diplomatic channels or further economic actions.