Trade Wars: China strikes back, adds tariffs on US products

Top 10 US imports from China Source: Census Bureau Graphic: Christopher Rugaber

Revelation 6:3-4 “when he opened the second seal, I heard the second living creature say, “Come!” 4 And out came another horse, bright red. Its rider was permitted to take peace from the earth, so that people should slay one another, and he was given a great sword.

Important Takeaways:

  • China announced retaliatory tariffs on select American imports and an antitrust investigation into Google on Tuesday, just minutes after a sweeping levy on Chinese products imposed by U.S. President Donald Trump took effect.
  • American tariffs on imports from Canada and Mexico were also set to go into effect Tuesday before Trump agreed to a 30-day pause as the two countries acted to address his concerns about border security and drug trafficking. Trump planned to talk with Chinese President Xi Jinping in the next few days.
  • This isn’t the first round of tit-for-tat actions between the two countries. China and the U.S. engaged in an escalating trade war in 2018 when Trump repeatedly raised tariffs on Chinese goods and China responded each time.
  • This time, analysts said, China is much better prepared, announcing a slew of measures that go beyond tariffs and cut across different sectors of the U.S. economy. The government is also more wary of upsetting its own fragile and heavily trade-dependent economy.
  • “It’s aiming for finding measures that maximize the impact and also minimize the risk that the Chinese economy may face,” said Gary Ng, a senior economist at Natixis Corporate and Investment Banking in Hong Kong. “At the same time … China is trying to increase its bargaining chips.”
  • John Gong, a professor at the University of International Business and Economics in Beijing, called the response a “measured” one. “I don’t think they want the trade war escalating,” he said. “And they see this example from Canada and Mexico and probably they are hoping for the same thing.”
  • China announced export controls on several elements critical to the production of modern high-tech products.
  • They include tungsten, tellurium, bismuth, molybdenum and indium, many of which are designated as critical minerals by the U.S. Geological Survey, meaning they are essential to U.S. economic or national security that have supply chains vulnerable to disruption.
  • The export controls are in addition to ones China placed in December on key elements such as gallium.

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