The US’ tariffs on Chinese, Mexican and Canadian imports have come into effect.
Trump has announced 25% tariffs against Canada and Mexico, and 20% tariffs against China – doubling the levy on China from last month.
Canada has said it will retaliate with 25% tariffs on $150bn worth of US goods, while Mexico and China have also vowed to retaliate.
Beijing’s finance ministry has announced 15% tariffs on some US agriculture imports, including chicken, wheat, corn and cotton.
It has slapped 10% tariffs on other produce such as soybeans, pork, beef, fruits, vegetables and dairy products. These duties will kick in on 10 March.
China’s commerce ministry has also added 10 US firms to the so-called “unreliable entity list” and 15 US entities to an export control list, effective from today.
Among the US entities it has targeted, Beijing has singled out US biotech firm Illumina, saying it adopts “discriminatory measures against Chinese firms”.
Last month, China had already added Illumina into its “unreliable entity list” as part of its counter measures against the US’ first round of tariffs.
Now, it has banned the company from exporting gene sequencing machines to China from 4 March, and added the company to its “unreliable entity list”.
Illumina “seriously hurts Chinese firms’ legitimate rights”, China’s commerce ministry said.
Among the 15 entities added to China’s export control list are companies in the aviation, defence, and the artificial intelligence sectors.
China’s top political advisory body will kick off its yearly meeting today, a day before the country’s rubber-stamp parliament meets.
China’s slowing economy is top of the agenda, and now so is Trump’s new 10% tariff – the country is already struggling with a chronic lack of domestic consumption, because of an ongoing property crisis and unemployment, among other things. The tariffs could now also hurt exports, which have been crucial for China’s growth.
Party leaders are expected to use the meeting to set a growth target of around 5% for 2025 – to achieve this, the Party has promised an increase in government spending and, above all, huge investment in what President Xi Jinping calls “high-quality development”: that is renewable energy and artificial intelligence.
The long-term aim is to become a world leader in these industries and, in time, become less vulnerable to American measures such as tariffs.
In the short-term though, China knows it has its own problems to fix, with or without US tariffs.
But the tariffs certainly make that harder to do.
For its part, Canada had said on Monday that it will retaliate with 25% tariffs against $155bn Canadian dollars’ worth worth of US goods when American tariffs kick in.
Prime Minister Justin Trudeau said Canada will immediately target $30bn worth of products, and target the remaining $125bn over 21 days. Any fresh duties Canada imposes will be in place for as long as the US tariffs are, Trudeau had said.
Canada’s dollar-for-dollar tariffs on US products during Trump’s first administration came up to C$16.6bn.
Another way Canada could hit back at the US – and probably the most painful – is to restrict access to energy. Canada is the top oil supplier to the US and also provides some electricity to 30% of the states.
