China retaliates with counter-tariffs on US imports, effective February 10
China’s Commerce Ministry announced on Tuesday that It would impose 15% tariffs on US coal and liquified natural gas (LNG) imports.
“Additional 10% tariffs will be imposed on crude oil, farm equipment and some automobiles,” the Ministry said.
The Commerce Ministry added that to "safeguard national security interests" the country is imposing export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items.
China retaliated after the new 10% tariff on all Chinese exports to the US comes into effect.
Market reaction
The Chinese-proxy, the Australian Dollar (AUD), remains under selling pressure amid expectations of counter-tariffs from China to US President Donald Trump’s tariffs. At the press time, AUD/USD is down 0.63% on the day, trading near 0.6185.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
