After the Trump administration increased extra tariffs on imports of Chinese goods from 10% to 20%, China hit back with its own tariff measures. An additional 15% tariff will be imposed on chicken, wheat, corn and cotton imported from the U.S., while a 10% tariff will be imposed on sorghum, soybean, pork, beef, aquatic products, fruits, vegetables and dairy products, according to a statement by the Customs Tariff Commission of the State Council. For these products, corresponding tariffs will be added to the current tariff rates. Current bonded policies as well as tax reduction and exemption policies will not change, and the latest tariffs to be imposed will not be reduced or exempted, according to the statement. The unilateral U.S. tariffs undermine the multilateral trading system, exacerbate the burden on American businesses and consumers, and damage the fundamental basis of economic and trade cooperation between China and the U.S., the Customs Tariff Commission of the State Council said.
The Ministry of Commerce (MOFCOM) also announced that China has initiated legal action against the U.S. under the WTO dispute settlement mechanism regarding the tariff increase on Chinese products. Chinese Foreign Ministry Spokesperson Lin Jian reiterated that the Chinese people have never been swayed by fallacies, deterred by intimidation, or cowed by bullying. Pressuring, coercion or threat is not the right way to engage with China. Exerting maximum pressure on China is a mistargeted and miscalculated approach. If the U.S. really wants to settle the fentanyl issue, it needs to stand by the principles of equality, mutual respect and mutual benefit and engage in consultation with China to address each other's concerns. If the U.S. has another agenda in mind and insists on waging a tariff war, trade war or whatever war, China will not flinch and is ready to make a due response, Lin said.
While the U.S. keeps intensifying trade friction with China citing the fentanyl issue, China's State Council Information Office (SCIO) released a white paper, titled “Controlling Fentanyl-related Substances – China's Contribution,” highlighting the country's rigorous control over the chemicals. China has attached great importance to maintaining control over fentanyl-related substances in recent years, the white paper says.
MOFCOM also announced that it decided to add 15 U.S. entities to the export control list in order to safeguard national security and interests and to fulfill the international obligations of non-proliferation. In addition, 10 U.S. firms were added to the country's unreliable entity list for arms sales to China's Taiwan region or conducting so-called cooperation on military technologies with the island. The companies involved are TCOM, Stick Rudder Enterprises, Teledyne Brown Engineering, Huntington Ingalls Industries, S3 AeroDefense, Cubic Corporation, TextOre, ACT1 Federal, Exovera and Planate Management Group. The companies are banned from engaging in import and export activities related to China and from making new investments within the territory of China.
The U.S. company Illumina has been banned from exporting gene sequencers to China following its inclusion on the unreliable entity list on February 4. MOFCOM also launched an anti-circumvention investigation into related U.S. fiber optic products, marking the first time China has initiated such an investigation, after learning relevant fiber optic products are suspected of circumventing China's anti-dumping measures. Based on the investigation's findings, a decision will be made on whether to impose anti-circumvention measures. In addition, the General Administration of Customs (GAC) announced that it has suspended the qualifications of three U.S. companies, including CHS, to export soybeans to China. The decision was made after Chinese Customs detected the presence of ergot and seed-coating agents in imported U.S. soybeans, and the move aims to protect the health of Chinese consumers and ensure the safety of imported grain. The GAC also suspended the import of U.S. logs to prevent harmful organisms and protect China's agricultural and forestry production as well as ecological safety, after detecting forest pests such as bark beetles and longhorn beetles in imported U.S. logs. Since the establishment of diplomatic ties 46 years ago, bilateral trade between China and the U.S. has increased more than 200-fold, with two-way investments reaching about USD250 billion.
This overview is based on reports by the Global Times and the China Daily.
