Trade War Begins? China Strikes Back with Tariffs

Trade War Begins? China Strikes Back with Tariffs

China has imposed new tariffs on key U.S. exports and introduced export controls on critical rare metals, escalating trade tensions. The U.S. is considering new reciprocal tariffs, including ending a tax exemption on small-value imports from China, which could generate $53 billion in federal revenue.

In what could be the beginning of a trade war, China’s retaliatory import taxes on certain U.S. goods are set to take effect on Monday.

Beijing has imposed a 15% tariff on coal and liquefied natural gas, along with a 10% tariff on crude oil, agricultural machinery, and pickup trucks. It has also introduced export controls on 25 rare metals critical to electronics and military equipment.

On Friday, U.S. President Donald Trump announced plans for new reciprocal tariffs but delayed imposing duties on small-value packages from China until a processing system is in place. Ending the exemption for these imports, and subjecting them to the new 10% tariff, could generate $53 billion in federal tax revenue, according to the Tax Foundation.

In 2023, U.S. customs processed over 1 billion small packages, up from 134 million in 2015, with about 4 million shipments arriving daily, many via platforms like Shein and Temu.