China responds to US tariffs
So much for my speculation yesterday that perhaps the PRC would wait until the end of the three-day Tomb Sweeping Festival holiday to respond to the US tariffs. Late Friday afternoon Beijing time, and nicely timed just before the US stock market open, the authorities announced retaliations using the expected breadth of their economic coercion response toolbox.
A tough response was expected, as I wrote Wednesday:
The PRC reaction is unlikely to be weak, and I doubt Xi and his team will just roll over and do nothing while trying to negotiate. Their reactions to the two rounds of fentanyl tariffs previewed their maturing economic coercion response toolbox, so we should probably assume any response may include more controls on exports of some critical minerals, investigations into and entity listing of some US firms, along with tariffs, and perhaps a larger than expected devaluation of the RMB against the dollar.
Today they announced measures in all those areas except the RMB:
China to impose additional 34-pct tariffs on all U.S. imports starting April 10
China customs authority suspends 6 U.S. firms' qualifications for exporting to China
China launches industrial competitiveness investigation into imported medical CT tubes
China bans export of dual-use items to 16 U.S. entities: commerce ministry
China adds 11 U.S. firms to unreliable entity list
China announces export control measures on certain rare earth-related items
China files lawsuit with WTO following U.S. slapping of "reciprocal tariffs" on trading partners
Chinese market regulator launches anti-monopoly probe into DuPont
Fred Gao helpfully posted full English translations of all the announcements on his Substack - China Respond US Tariff With Joint Action.
A few minutes ago President Trump posted about the response on Truth Social:
That post sounds like a threat that the US will add more measures, so the risk of an escalation spiral may be increasing. Which leader can take a breath and say “we should talk”? Will President Trump kill the TikTok deal rumored to be announced today, or at least not offer another extension and tell ByteDance to propose a deal that satisfies the law or shut down?
For this Tomb Sweeping Festival holiday we may want to go sweep the graves of globalization and US-China trade…
The export controlled rare earth-related items: