As Donald Trump continues to flex the United States’ financial power by ordering tariffs on imports, trade partners are gradually figuring out how best to respond to the threats, said observers.
On Monday (Feb 10), fresh tariffs from China kicked in for certain American goods, including 15 per cent on coal and liquefied natural gas, and 10 per cent on crude oil, agricultural machinery and large-engine cars.
Beijing announced the plan mere minutes after sweeping US levies of 10 per cent on all Chinese products came into effect last Tuesday.
Experts said China, after going through a tit-for-tat trade spat during Trump’s first presidency, is prepared this time round, warning that Beijing might retaliate with more than just tariffs.
“China's clearly got the mid-term to long-term game,” said Alex Capri, a senior lecturer at the National University of Singapore (NUS) Business School.
“When it comes to the broader geopolitical competition between China and the US… (China could) look at things like conducting anti-monopoly type investigations, performing (stiffer) audits of (US) firms in China, and (exerting) export controls and restrictions.”
Chinese authorities also launched an antitrust probe into Google, putting the technology giant on notice for possible sanctions.
“There are also anti-espionage elements that the Chinese government can roll out to put pressure on American multinational companies doing business in China, to get (them) to put pressure on the Trump administration to roll back (tariffs),” Capri told CNA’s Asia First programme.
Still, Beijing’s retaliation was controlled and measured, said Tommy Xie, head of Asia Macro Research at OCBC Bank.
He estimated Beijing is targeting about US$15 billion worth of US imports, a significantly smaller amount compared to US$50 billion during Trump’s first term.
“This time, the (targeted amount) is much, much smaller. From that perspective, it seems like Beijing is maybe trying to moderate the tensions,” he said.
Xie voiced disappointment at a lack of negotiation between President Trump and his Chinese counterpart Xi Jinping – which observers have hoped for following last-ditch talks between US and its neighbours Canada and Mexico over tariffs last week.