4 February 2025

Laura Baker

China correspondent

Reuters cars are driving on the road during the morning peak hour in BeijingReuters

Cars with large engines are among the American imports

Beijing made its decision. Days after warning against counter -measures and urged Washington to enter into negotiations and “interview China in the middle of the road”, I decided to return – or at least a threat to take revenge on its definitions.

China said it would carry out a 15 % tariff on coal and liquefied natural gas products, as well as a 10 % tariff on crude oil, agricultural machines, and cars with large engines imported from the United States from February 10.

History is important. This means that there is still time for the two largest economies in the world to back down from the edge of the trade war.

The two leaders set a call later this week, according to the White House, and there are signs, although today's announcement, that China is in a listening mode and keeps the door open to conversations.

First, anti -China measures are limited in its range compared to the imposition of the Donald Trump by 10 % on all Chinese goods heading to the United States.

America is the largest source of liquid natural gas worldwide, but China only represents about 2.3 % of these exports and its main imports from Europe and Japan.

This calculated and selective targeting of goods may be just an opening snapshot by Beijing, a way to get some strength and benefit from any conversations.

China officials may be encouraged at the friendly beginning of the United States' relationship since Trump took office.

The US President said that he had made a “very good” phone call with the eleventh president a few days before his opening concert, which was attended by the Supreme Chinese official at all to be sent to such an event. He also suggested that he hopes to work with Shi to solve the Russian war in Ukraine.

President Shi may not want to choose a battle with Trump yet because he is busy trying to form his sick economy.

This is also a familiar area for both leaders – although they may not be keen to restore the past. There was a honeymoon period in relations between the United States of China during the last Trump term, before the relationship was strained.

To deal or not deal

It will also be difficult for Trump to make a deal with China more than Mexico and Canada – and he will rely a lot on what he wants from Beijing.

China is the main competition of the economy in Washington, and the country's cutting off the main supply chains was a goal from the Trump administration.

If Trump requests a lot, Shi may feel that he can get away and there will be limits for how much he is ready to pay.

The US president deals with China much more confident than he did at that time. Beijing has expanded a global imprint, and it is now the main commercial partner of more than 120 countries.

Over the past two decades, it has also tried to reduce the importance of trade in its economy and increase local production. Today, imports and exports account for about 37 % of China GDP, compared to more than 60 % in the early first decade of the twentieth century, according to the Foreign Relations Council.

A 10 % bite tariff will, but Beijing may feel that it can absorb the strike – at the present time.

Fear will be that President Trump is serious about intensifying that percentage to 60 % that he pledged during his campaign or that he will continue to use the threat of definitions as a repeated diplomatic tool to keep the head of Shi.

If this happens, Beijing will want to be ready and this means that there is a clear strategy if this is escalating.

Learning from the past

The last time the leaders signed a deal that did not end well.

The two countries released a tariff for hundreds of billions of dollars from goods from 2018.

It lasted more than two years until China eventually agreed to spend $ 200 billion (161 billion pounds) annually on American goods in 2020.

Washington was hoping that the deal would reduce the huge trade deficit between China and the United States, but the plan was out of its course by the Covid's pandemic and that this deficit is now sitting at 361 billion dollars, according to Chinese customs data.

There are also major challenges for China as it is considering several steps in any negotiations.

Beijing is still selling nearly four times the goods to the United States more than it bought – and during Trump's first office, he ran out of the elements targeting.

Analysts believe that China is now looking at a wide range of measures of customs tariffs only for revenge if the trade war increases.

The clock is knocking. This is not a complete trade war, yet. Companies all over the world will see if the two leaders can reach a kind of settlement later this week.

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