China immediately retaliated against the U.S. as a 10% tariff on all Chinese goods went into effect, announcing their own levies on some U.S. products. The Chinese government imposed additional tariffs of 15% on coal and liquefied natural gas, and 10% on crude oil, agricultural machinery, automobiles, and trucks. Beijing also launched an investigation into Google for antitrust violations and added companies to an “unreliable entity list.”
The U.S. tariffs with China violate World Trade Organization rules and risk escalating a trade war between the two largest economies. Beijing has referred the matter to the WTO to safeguard its rights and interests. The Chinese tariffs are more targeted than the U.S. tariffs and could impact industries like chipmakers who rely on critical components produced in China.
The U.S. tariffs were imposed to pressure China in addressing the flow of precursor chemicals used in manufacturing fentanyl, a deadly opioid, but China states that reducing domestic demand is key. Talks of a deal with China did not materialize, with President Trump threatening substantial tariffs if necessary.
Both countries appear to be at a standstill, with China urging the U.S. to address the fentanyl crisis domestically while the U.S. is adamant about using tariffs to push China to take action. The situation remains tense, with the potential for further escalation as negotiations between the two economic giants continue.
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