China’s response to President Donald Trump’s tariffs put the tech sector, retailers, and more in the crosshairs at the same time Google faces increased scrutiny.
As part of the herculean effort to reassert American dominance on the world stage after four years of placating globalist foreign policy, the president’s first weeks in office have involved considerable talks and strategizing. Faced with a blanket 10% tariff on their goods shipped to the United States, China responded with a threat of their own 15% tariff on select items ahead of an expected call with Trump.
Set to take effect Monday, the Associated Press detailed that a 15% tariff will be applied to coal and liquified natural gas while a 10% tariff had been applied to crude oil, large-engine cars, and agricultural machinery.
“They have a much more developed export control regime,” said former State Department official Philip Luck, an economist with the Center for Strategic and International Studies. “We depend on them for a lot of critical minerals: gallium, germanium, graphite, a host of others.”
“So… they could put some significant harm on our economy,” he explained as, along with export controls imposed in December, China announced further controls on critical minerals for high-tech production such as bismuth, indium, molybdenum, tellurium, and tungsten.
Further, biotech company Illumina and PVH Group, the owners of Calvin Klein and Tommy Hilfiger, were placed on an unreliable entities list impacting their activity in China at the same time that an antitrust investigation was opened by China against Google, which the AP noted had a limited presence in China where, like other Western platforms, it is blocked.
“A risk is that this is the beginning of a tit-for-tat trade war, which could result in lower GDP growth everywhere, higher US inflation, a stronger dollar, and upside pressure on US interest rates,” said Stephen Dover, chief market strategist at Franklin Templeton Institute.
While Secretary of State Marco Rubio is working on realigning the “unacceptable” status quo of the Panama Canal with regard to Chinese influence, Trump’s order also ended the “de minimis rule” that allowed for imports valued less than $800 to enter the nation duty-free when shipped directly to the consumer.
This is expected to seriously impact retailers like Shein and Temu who could pass on the new costs to their customers, Hudson Institute senior fellow Michael Sobolik suggested to The Telegraph.
“If [Shien and Temu] behave like most companies, I wouldn’t be surprised if they pass on the costs,” he said. “But the real challenge is that their entire business model depends on how insanely cheap these products are.”
“American consumers are going to have to ask themselves, are they going to be willing to pay higher prices for these goods?” added Sobolik.
Shein and Temu are said to account for around 600,000 de minimis packages processed daily by U.S. Customs and Border Protection which handles roughly a billion such shipments annually.
In their own statement on the tariffs, the State Council Tariff Commission for China’s cabinet argued, “The U.S.’s unilateral tariff increase seriously violates the rules of the World Trade Organization. It is not only unhelpful in solving its own problems but also damages normal economic and trade cooperation between China and the U.S.”
Meanwhile, ahead of planned talks with Chinese President Xi Jinping, Trump warned that the 10% tariff was “just an opening salvo.”
“If we can’t make a deal with China, then the tariffs will be very, very substantial,” said the commander-in-chief.
While many on the left had criticized Trump’s tariff strategy, the tactic proved effective Monday as both Canada and Mexico announced a deal to delay the tariffs as they agreed to do their part in securing the borders of the United States.
Michael Steel, senior vice president of communications for Business Roundtable, released a statement that read, “Business Roundtable applauds President Trump for working swiftly with Mexico and Canada to strengthen security at the border, curb the flow of fentanyl into the country and pause the implementation of tariffs. We are hopeful this progress leads to long-term deals that avoid tariffs on our North American trading partners.”
“Business Roundtable applauds President Trump for working swiftly with Mexico and Canada to strengthen security at the border, curb the flow of fentanyl into the country and pause the implementation of tariffs.” pic.twitter.com/RnwwDuVL4V
— Rapid Response 47 (@RapidResponse47) February 3, 2025
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