As part of its retaliation against Trump’s tariffs, Beijing has added two US companies to its “unreliable entity” list.
The two “blacklisted” companies are PVH Corp, the holding company for brands including Calvin Klein and Tommy Hilfiger, and US biotechnology firm Illumina.
In a statement, China’s commerce ministry accused the firms of “discriminatory measures against Chinese enterprises”.
It also said the move was designed to “safeguard national sovereignty, security and development interests, in accordance with relevant laws”.
Firms added to the list may face a number of sanctions including fines and having the work visas of their foreign employees revoked.
China takes action against US tariffs at the WTO
Beijing says it has followed through with its warning that it would file a complaint with the World Trade Organization (WTO) in response to the new tariffs by the Trump administration.
In a statement, China’s Commerce Ministry says it is resorting to the WTO’s dispute settlement “to safeguard its legitimate rights and interests”.
“The U.S. imposition of additional tariffs on Chinese products severely violates WTO rules. This action is egregious in nature and represents a typical example of unilateralism and trade protectionism,” it adds.
What are tariffs and how do they work?
Tariffs are taxes charged on goods imported from other countries.
Most tariffs are set as a percentage of the value of the goods, and in general, the importer pays them.
So, a product imported to the US from China worth $4 would face an additional $0.40 charge applied to it (as a reminder, the 10% US tariff on Chinese goods began at 00:01 ET / 05:01 GMT).
Increasing the price of imported goods is aimed at encouraging consumers to buy cheaper domestic products instead, to help boost their own economy’s growth.
US President Donald Trump sees them as a way of growing the US economy, protecting jobs, and raising tax revenue.
But, economic studies of the impact of tariffs, external – which Trump also imposed during his first term in office – suggest the measures ultimately made prices higher for US consumers.
How did we get here? A timeline of Trump’s tariff plans
A day can be a long time in politics, and this time yesterday Canada and Mexico were readying themselves for a North American trade war.
As of this morning, though, only China is being hit by increased import charges. They have now vowed to retaliate after 10% tariffs were placed on Chinese imports into the US earlier today.
Here’s how we got here:
- On 1 February a White House statement said Donald Trump would be implementing a 25% additional tariff on imports from Canada and Mexico and a 10% tariff on China
- He said this was to hold the countries accountable on halting illegal immigration and stopping drugs flowing into the US
- Mexico and Canada vowed to hit back with tariffs of their own and China said it would take “necessary countermeasures”
- On 3 February, Mexican President Claudia Sheinbaum announced that she and Trump had reached an agreement to halt the tariffs for 30 days – with Mexico agreeing to send 10,000 National Guard members to the border
- Later that day, Canadian Prime Minister Justin Trudeau said he had a last-minute call with Trump. Canada agreed to reinforce its border in exchange for a 30-day postponement on tariffs
- But without an agreement reached with Beijing by 00:01 EST (05:00 GMT) this morning, a US tariff of 10% on Chinese imports came into effect
- Shortly after, Beijing announced it would be imposing retaliatory tariffs on a raft of American products, including 15% on coal and 10% on crude oil
China and the US go head-to-head on trade before
Trade relations between the world’s two largest economies first descended into a full-blown tariff war during Trump’s first term in 2018.
At the time, Trump was implementing his “America First” agenda, imposing round after round of tariffs on foreign goods. Hundreds of billions of dollars’ worth of Chinese products faced new or higher tariffs, resulting in tit-for-tat retaliation from Beijing.
Under President Joe Biden the US kept most of those tariffs and even increased some of them. Adopting a more targeted approach, Biden took aim at key high-tech sectors. He hiked tariffs and restricted trade in products like semiconductors and electric vehicles.
Despite the tensions, the world’s two largest economies remain deeply intertwined – and many commentators say theirs is the world’s most consequential bilateral relationship.
The two countries are among each other’s top trading partners – US imports from China reached $401bn (£323bn) in the first 11 months of last year, while China’s imports from the US were worth $131bn (£106bn).
A quick breakdown of Beijing’s countermeasures
China has slapped counter tariffs on US goods, here’s a quick look at the measures Beijing has imposed on some imports:
- A 15% tariff on coal and liquefied natural gas
- A 10% tax on crude oil, agricultural machinery, pickup trucks and large-engine cars
- Announced an anti-monopoly investigation into Google
- Placed export controls on 25 types of rare metal products
- Adding PVH Corp, the holding company for Calvin Klein and other brands, and US biotechnology company Illumina to its “unreliable entities” list.
What businesses does Google still have in China?
China has announced an investigation into Google for alleged antitrust violations.
The investigation will be carried out by the State Administration for Market Regulation – but there are no further details on the probe yet. The BBC has reached out to Google for comment.
Although Google’s search services have been blocked in China since 2010, it still has some business activities in China. For example it still provides apps and games to the Chinese market through partnership with local developers.
US tariffs ‘seriously violate’ WTO rules, China says
In a statement announcing the retaliatory tariffs, China accused the Trump administration of breaking international trade rules.
“The US’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization. It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the US.”
China’s announcement signals Beijing’s willingness to adopt a tit-for-tat response to US tariffs, surprising some observers.
However, unlike the tariffs imposed by the US, which target all Chinese goods, China’s import taxes will target only certain types of products.
China’s anti-monopoly regulator probes Google
China’s competition watchdog says it has launched an investigation into Google.
The State Administration for Market Regulation says Google is suspected of violating anti-monopoly laws.
We will bring you more details about this as we get them.
China hits back with tariffs on US goods
Beijing has said it will impose retaliatory tariffs on a raft of US products.
The counter measures include a 15% tax on coal and liquefied natural gas imports from the US.
Crude oil, agricultural machinery, pickup trucks and large-engine cars will face a 10% tariff.
The announcement came shortly after Donald Trump’s new 10% tariffs on China came into effect.
China is to impose retaliatory tariffs against the US.
They will hit US imports of some types of sports cars, pick-up trucks, coal, liquified natural gas, crude oil and agricultural machinery.
Deadline for new US tariffs on China passes
The deadline for Donald Trump’s new 10% tariffs on China to come into effect has just passed.
The move escalates trade tensions between the world’s two biggest economies.
Beijing has previously called for talks to negotiate a deal.
China’s President Xi Jinping and Trump are expected to speak this week.
SOURCE: BBC NEWS
