China has decided to impose tariffs on certain American products and warned several companies, including Google, of possible sanctions, as part of a moderate response to sweeping tariffs on Chinese imports imposed by US President Donald Trump.
Beijing's relatively subdued response to Trump's imposition of 10 percent tariffs on all Chinese imports suggests that Chinese officials are trying to persuade Trump to negotiate to avoid an open trade war between the world's two largest economies.
British research firm Capital Economics estimated that additional Chinese tariffs would cover about $20 billion in annual imports, compared with $450 billion worth of Chinese products covered by Trump's tariffs, which took effect yesterday.
"The measures are quite moderate, at least compared to US moves, and they are carefully balanced to send a message to the US," Julian Evans-Pritchard, director of the China economy at the firm, told Reuters.
Trump on Monday suspended a threat of 25% tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in exchange for concessions on border control and crime suppression.
Yesterday, the White House announced that Trump and Chinese President Xi Jinping were scheduled to talk later in the day, but the Wall Street Journal, citing an unnamed US official, reported that the conversation would not take place.
Trump said on Sunday that the European Union could be his next target for tariffs, but did not specify when, Reuters reported.
Ursula von der Leyen, the president of the European Commission, said Brussels would be prepared for tough negotiations, but stressed the need to lay the foundations for a stronger partnership with the EU's largest trading and investment partner.
"We will be open and pragmatic in how we achieve this. But we will also make it clear that we will always protect our own interests in any way and whenever necessary," she stressed.
The European Commission and the new US administration have been in contact at a technical level, but von der Leyen and Trump have not yet spoken directly, a Commission spokesman said.
China's new measures, announced as Trump's tariffs took effect, include a 15% levy on American coal and liquefied natural gas (LNG) and a 10% levy on crude oil, agricultural equipment and a small number of trucks, as well as sedans with large engines, shipped from the US to China.
China has announced it is imposing export controls on certain metals, including tungsten, which are crucial for electronics, military equipment and solar panels.
The new Chinese tariffs will not take effect until Monday, giving Washington and Beijing time to try to reach an agreement.
During his first term as president, Trump began a two-year trade war with China over its trade surplus with the US, with reciprocal tariffs disrupting global supply chains and hurting the world economy.
"The trade war is in its early stages, so the likelihood of additional tariffs is high," said a note from Oxford Economics, which lowered its growth forecast for the Chinese economy.
Trump has said he could further increase tariffs on China if Beijing does not stop the flow of fentanyl, a deadly opioid, into the United States.
China claims that fentanyl is an American problem and announces that it will challenge the tariffs at the World Trade Organization and take other countermeasures, while at the same time leaving the door open for negotiations.
Relief came in Ottawa and Mexico City after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to tighten border controls, delaying 25% tariffs, which were set to take effect Tuesday, for 30 days.
European Trade Commissioner Maroš Šefčovič said he wanted early talks with the US to prevent possible tariffs.
“We believe that through constructive engagement and dialogue we can solve this problem,” he said.
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