On Monday, the world's two largest economies officially began a full-scale trade war as China's anti-tax rate on previously announced taxes by U.S. President Donald Trump began to take effect.
Last week, Beijing announced taxes for imports of about $14 billion from the United States, and soon the tariffs imposed by the United States came into effect on February 4.
China's Treasury Department has said that starting from February 10, a 15% tax will be imposed on U.S. coal and liquefied natural gas imports, as well as crude oil and some cars.
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At a regular press conference on Monday, Chinese Foreign Ministry spokesman Guo Jiakun declined to comment on whether taxation on U.S. products has officially come into effect.
However, he repeated China’s criticism of tariffs, saying: “There is no winner in the trade and tariff war.”
“What is needed now is not a more unilateral tariff, but a dialogue and consultation based on equality and mutual respect.” explainadding that the United States needs to stop “arms trade and economic issues.”
The day after Trump announced, China's tariffs took effect Plans impose Tariffs on all steel and aluminum imported to the United States. The New York Times Given that exports of these two metals are very cheap, China is at the heart of those tariffs and is attracting the U.S. industry.
When asked about those newly announced tariffs, Guo from the Chinese Foreign Ministry refused to say too much except: “Protectionism does nothing.”
He has not yet made any signs of progress in the talks between Beijing and Washington. Trump said last week He's not in a hurry Talk to Chinese President Xi Jinping in an attempt to digest the new trade war between the two superpowers.
Nevertheless, Beijing's tariff range came into effect on Monday compared to U.S. taxes, which target $525 billion worth of Chinese goods.
The leaner scope shows that China has limited ability to respond to Trump tariffs given its own sputtering economy. Poor demand at home means China is now increasingly relying on exports to drive growth.
Chinese tariff winners and losers
China is the world's highest energy importer, but buying from the United States is relatively modest, which hurts the impact of retaliatory actions.
China's imports of U.S. crude oil fell 52% to about 230,540 barrels (BPD) in the first 11 months of 2024 from the same period a year ago, according to the U.S. Energy Information Administration.
According to Chinese customs data, U.S. imports account for 1.7% of China's crude oil imports and are worth about $6 billion, down from 2.5% in 2023.
However, customs data show that China's imports of liquefied natural gas from the United States are growing, with a total of 4.16 million tons last year, worth $2.41 billion, showing that fuel used in power generation is almost twice as high as in 2018, accounting for about 2018 purchased by China 5.4%.
ICIS analyst Alex Siow said U.S. liquefied natural gas imported through long-term contracts may still be economical for Chinese buyers, but they are likely to avoid buying spot U.S. goods, ICIS analyst Alex Siow said.
“Chinese companies may be looking for other spot resources, such as those in Asia,” he said. “However, given that 2025 is still a tight market, it may not be easy to find.”
Meanwhile, MST Marquee energy analyst Saul Kavonic said that Chinese tariffs that acquired about 10% of U.S. LNG exports last year will bring more U.S. sales to Europe and benefit other regional producers, such as producers in other regions.
“The negative impact of these tariffs on U.S. LNG will only partially offset strong demand from other buyers to take more U.S. LNG from Trump's pressure to rebalance the trade deficit,” he said.
Oil prices rose on Monday, downside last week rebounded as investors feared Trump's tariff stability impact.
- Vishakha Saxena, with Reuters
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