China Retaliates With Tariffs and Trade Restrictions in Response to U.S. Tariffs
Trade Update • Feb 4, 2025
hina has announced a series of retaliatory measures against the United States in response to the latest round of U.S. tariffs. These measures include increased tariffs on key imports, expanded export controls on critical minerals, and regulatory actions targeting U.S. companies. The new policies will take effect beginning on February 10.
Tariffs on U.S. Goods
Effective February 10, China will impose additional tariffs on certain U.S. imports, which will be levied on top of existing tariff rates:
- 15% tariffs on coal and liquefied natural gas (LNG) imports.
- 10% tariffs on crude oil, agricultural machinery, and large-engine vehicles.
China’s State Council Tariff Commission has stated that these tariff hikes are in direct response to the U.S.’s recent 10% tariff increases on Chinese goods and that such tariff increases violate WTO rules and will negatively impact global trade cooperation. Additionally, China has signaled that further tariff escalations could occur if the U.S. raises its tariff rates beyond 10%.
Export Controls on Critical Minerals
In addition to the tariffs, China has expanded its export restrictions on several critical materials used in high-tech production, semiconductor manufacturing, and defense industries. These new controls took effect on February 4 and include:
- Bismuth
- Indium
- Molybdenum
- Tungsten
- Tellurium
- Triphenylbismuth
- Trimethylindium
- Triethylindium
These measures follow previous restrictions on gallium, germanium, graphite, and other strategic minerals, further tightening China’s grip on materials vital to U.S. industries. Analysts warn that these export restrictions could severely disrupt U.S. supply chains, particularly in the semiconductor, defense, and battery sectors.
Regulatory Actions Targeting U.S. Companies
China has also taken regulatory steps against American businesses operating within its borders:
- Unreliable Entities List: As of February 4, China has added PVH Group (parent company of Calvin Klein and Tommy Hilfiger) and biotech firm Illumina to its Unreliable Entities List. Companies on this list face severe restrictions, including:
- Prohibitions on import and export activities involving China
- Bans on new investments in China
- Denial of visa applications and cancellation of existing visas for company executives
- Antitrust Investigation into Google: China’s State Administration for Market Regulation has launched an investigation into Google over potential antitrust violations. While not officially linked to the trade dispute, the timing coincides with the imposition of U.S. tariffs, raising concerns about retaliatory regulatory actions against major U.S. tech firms.
Impact on U.S. Businesses and Global Trade
These measures introduce new challenges for U.S. companies and global supply chains:
- Higher import costs for businesses relying on Chinese goods
- Increased regulatory scrutiny for American firms operating in China
- Disruptions in the supply of critical minerals, affecting the semiconductor, aerospace, and manufacturing industries
How GHY Can Help
With these new trade barriers in place, U.S. businesses must take proactive steps to mitigate risks and maintain compliance with evolving regulations. GHY can assist businesses by providing:
- Comprehensive risk assessments to evaluate the impact of tariffs and export restrictions
- Supply chain restructuring strategies to minimize dependence on restricted Chinese materials
- Tariff classification and compliance services to ensure accurate duty payments and avoid penalties
- Trade facilitation solutions, including duty deferral programs and alternative sourcing options
- Regulatory guidance on navigating China’s import/export controls and U.S. trade policy changes
As trade tensions continue to escalate, staying ahead of regulatory shifts is critical. GHY’s expertise in customs brokerage and international trade compliance ensures that businesses can adapt to these challenges while maintaining operational efficiency.
Contact Us Today! gts@ghy.com, or call +1 (800) 667-0771.
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