China's new tariffs seen as 'measured response' to US

China has imposed targeted tariffs on American imports and put several US companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Donald Trump. or signup to continue reading Beijing's limited counter to Trump's imposition of a 10 per cent tariff on all Chinese imports underscored the attempt by Chinese policymakers to engage Trump in talks that could avert an outright trade war between the world's two largest economies. Capital Economics, a UK-based research firm, estimated that China's additional tariffs would apply to about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff that took effect on Tuesday.

"The measures are fairly modest, at least relative to US moves, and have been calibrated to send a message to the US," Julian Evans-Pritchard, the firm's head of China Economics said in a note. Trump plans to speak to Chinese President Xi Jinping later in the week, a White House spokesperson said. China's new measures, announced as the Trump tariff took effect, include a 15 per cent levy on US coal and LNG and 10 per cent for crude oil, farm equipment and a small number of trucks as well as big-engine sedans shipped to China from the United States.



China also said it was starting an anti-monopoly investigation into Alphabet Inc's Google. It put both PVH Corp the holding company for brands including Calvin Klein, and US biotechnology company Illumina on a list for potential sanctions. Separately, China said it was imposing export controls on some metals, including tungsten, that are critical for electronics, military equipment and solar panels.

The 10 per cent-duty China announced on electric trucks imported from the United States could apply to Elon Musk's Cybertruck, a niche offering Tesla has been promoting in China. Tesla had no immediate comment. China's new tariffs will not take effect until February 10, giving Washington and Beijing some time to try and reach a deal that Chinese policymakers have indicated they hope to strike with Trump at a time when China's domestic demand has been sputtering.

During his first term in 2018, Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy. Trump warned he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the United States. China has called fentanyl America's problem and said it would challenge the tariffs at the World Trade Organisation and take other countermeasures, but also left the door open for talks.

Trump on Monday suspended his threat of 25 per cent tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighbouring countries. Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Trump's demand to crack down on immigration and drug smuggling. The United States also made a commitment to prevent trafficking of high-powered weapons to Mexico, Sheinbaum said.

The Canadian dollar earlier soared after slumping to its lowest in more than two decades. The news also gave US stock index futures a lift after a day of losses on Wall Street, and sent oil prices lower. Trump suggested on Sunday the 27-nation European Union would be his next target, but did not say when.

EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs, but also called for reason and negotiation. The US is the EU's largest trade and investment partner. Trump acknowledged over the weekend that his tariffs could cause some short-term pain for US consumers.

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