[CTC] More on tariffs (NYT, IAM, SC)

Tue Feb 4 05:46:04 PST 2025

Latest on US-China tariffs from NYT, plus important statements from the Machinists and Sierra Club below...

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

https://www.nytimes.com/2025/02/04/business/economy/trump-tariffs-china.html <https://www.nytimes.com/2025/02/04/business/economy/trump-tariffs-china.html> 
China Swiftly Counters Trump’s Tariffs With a Flurry of Trade Curbs

After a 10 percent tariff on Chinese products took effect on Tuesday, China announced retaliatory measures, including tariffs and an investigation of Google.

Beijing responded swiftly on Tuesday to the tariffs President Trump had promised, announcing a fusillade of countermeasures targeting American companies and imports of critical products.

Mr. Trump’s 10 percent tariff on all Chinese products went into effect at 12:01 a.m. Tuesday, the result of an executive order issued over the weekend aimed at pressuring Beijing to crack down on fentanyl shipments into the United States.

The Chinese government came back with a series of retaliatory steps, including additional tariffs on liquefied natural gas, coal, farm machinery and other products from the United States. It also said it had implemented restrictions on the export of certain critical minerals <https://www.nytimes.com/2024/12/09/business/china-critical-minerals.html>, many of which are used in the production of high-tech products.

In addition, Chinese market regulators said they had launched an antimonopoly investigation into Google. Google is blocked from China’s internet, but the move may disrupt the company’s dealings with Chinese companies.

The U.S. tariffs, which Mr. Trump said on Monday were an “opening salvo,” come on top of levies that the president imposed during his first term. Many Chinese products already faced a 10 or 25 percent tariff, and the move adds a 10 percent tariff to more than $400 billion of goods that Americans purchase from China each year.

Mr. Trump had been planning to hit America’s three largest trading partners, Canada, Mexico and China, with tariffs of varying degrees. But after days of frantic negotiations, Mr. Trump agreed to pause the tariffs on Mexico and Canada <https://www.nytimes.com/2025/02/03/business/canada-mexico-tariffs-trump.html> for 30 days after the Canadian and Mexican governments promised to step up their oversight of fentanyl and the border.

On Monday, Mr. Trump said he planned to speak with the Chinese leader Xi Jinping <https://www.nytimes.com/2025/02/02/business/trump-tariffs-china.html> within the next 24 hours, but it was not clear exactly when the phone call would take place. Before there was any word of a call, the Chinese authorities rolled out the measures aimed at punishing American companies.

China’s counterpunches suggested an effort to hurt American businesses and send a warning to the Trump administration, while holding in reserve measures that could do even more serious damage to trade between the world’s two biggest economies. But the measures announced by Beijing, particularly the tariffs and export controls, could take time for Chinese officials to revoke, even if Mr. Trump were to signal a willingness to compromise.

“As far as I can see so far, it’s a relatively limited response, affecting no more than 30 percent of U.S. exports to China,” said Bert Hofman, a former World Bank official and now an adjunct professor at the East Asian Institute at the National University of Singapore. “They’re probably trying to keep their powder dry, because this could still be only the first step from the Trump administration.”

The Trump administration’s tariffs “seriously undermine the rules-based multilateral training system, damage the foundation of economic and trade cooperation between China and the United States, and disrupt the stability of global industry supply chains,” China’s Ministry of Commerce <https://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202502/t20250204_3955222.htm> said in a statement.

The commerce ministry and China’s customs agency announced new restrictions on exports of tungsten, tellurium, molybdenum and other metals important for industry and new technologies, citing “national security and interests.”

China’s measures included an additional 10 percent tariff on crude oil, agricultural equipment, larger cars and pickup trucks, as well as an additional 15 percent tariff on coal and natural gas, the Chinese tax authorities announced <https://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202502/t20250204_3955222.htm>.

China also said it had added two American companies to its “unreliable entities” list. One of the companies, PVH — the American retailer that owns the Calvin Klein and Tommy Hilfiger brands — had already been placed under investigation <https://www.nytimes.com/2024/09/24/business/china-xinjiang-calvin-klein-tommy-hilfiger.html> by Chinese regulators in September. China said PVH had taken “discriminatory measures” against goods from the Xinjiang region in China’s far west.

Google did not immediately respond to a request for comment on the announcement of the antitrust investigation.

While Google dominates the world in digital advertising and internet search, restrictions in China mean it cannot operate its search engine, its YouTube video platform or its app store, Google Play, in the country. Still, its operating system, Android, is used by some Chinese phone makers, including Xiaomi, Lenovo and Vivo. Regulators around the world, including ones in the United States, Canada, Europe and South Korea, have probed Google on antitrust grounds or brought related cases.

Besides imposing his new tariffs, Mr. Trump’s executive order, signed on Saturday, ended a popular workaround <https://www.nytimes.com/2025/02/03/us/politics/trump-tariffs-shein-temu-loophole.html> that many Chinese companies had used to send goods to the United States without paying the tariffs that the president imposed in 2018. The provision, known as de minimis, allowed popular e-commerce companies like Shein and Temu to send billions of dollars of products from Chinese factories directly to American consumers without tariffs.

The deals that Mr. Trump made with Canada and Mexico on Monday brought the United States back from the brink of a potentially devastating trade war with two of its closest allies. But it did not preclude the threat of similar conflicts happening later.

On Monday, Mr. Trump made clear that he would deploy tariffs liberally to get other governments to give him what he wants.

Mr. Trump has accused China of failing to do enough to stop the export of fentanyl and the chemicals that are used to make it. In the executive order he issued on Saturday, Mr. Trump said that shipments of synthetic opioids had ravaged U.S. communities, put a severe strain on the health care system and were the leading cause of death for people aged 18 to 45 in the United States.

It’s not clear what steps the Chinese government has recently taken, if any, to restrict the fentanyl trade, beyond its previous law enforcement collaboration with the United States. Mr. Trump discussed fentanyl with Mr. Xi in a phone call during his first week in office.

During Mr. Trump’s first term, China introduced a ban on fentanyl and began working with the United States to catch traffickers, under pressure from Mr. Trump. And in 2023, Mr. Xi and then-President Joseph R. Biden Jr. agreed to a series of bilateral talks <https://www.nytimes.com/2023/11/16/us/politics/biden-xi-china-power-balance.html> on narcotics after they met in Woodside, Calif.

A spokesman for the Chinese Embassy in Washington had said that China firmly opposed tariffs and that any differences or frictions should be resolved through dialogue. “There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world,” the spokesman said.

Mr. Trump waged an intense trade war with China during his first term, after initiating a trade case that found that the country had unfairly infringed on U.S. intellectual property. He ratcheted up tariffs on China and ultimately applied tariffs to about 60 percent of the country’s exports to the United States.

Now Mr. Trump, in office for two weeks, has initiated a new exchange with China.

“This is likely only the beginning of a long process for the two countries to negotiate,” Zhiwei Zhang, the president and chief economist of Pinpoint Asset Management, an investment firm in Hong Kong, said in written comments. “There is hope to de-escalate in this process, though the road ahead may be bumpy.”

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https://www.goiam.org/press-releases/iam-union-while-tariffs-pause-u-s-and-canadian-workers-should-have-seat-at-table/ <https://www.goiam.org/press-releases/iam-union-while-tariffs-pause-u-s-and-canadian-workers-should-have-seat-at-table/> 

IAM Union: While Tariffs Pause, U.S. and Canadian Workers Should Have Seat at Table 
February 3, 2025

WASHINGTON, Feb. 3, 2025 – Brian Bryant, International President of the 600,000-member IAM Union, and David Chartrand, IAM Canadian General Vice President, issued the following statement following a pause of proposed U.S.-Canadian tariffs.

“As the largest aerospace and defense labor union in the United States and Canada, the IAM Union is relieved that destructive tariffs between our two allied countries are being paused. A new path forward—one that doesn’t put U.S. and Canadian workers in a needless cycle of worrying about job loss due to tariff threats between allies—is possible. This moment offers the perfect opportunity for workers and unions from both countries to be a part of the solution moving forward. 

“For decades, we have seen millions of good-paying, high-skilled U.S. and Canadian jobs outsourced to countries with little to no labor rights. Thanks to bad trade deals, tens of thousands of good IAM Union aerospace and defense jobs have become low-wage jobs in Mexico, while China has used forced technology offsets to create its own aerospace industry. This race-to-the-bottom model is being replicated by other bad actors across the globe – and it’s hurting all workers, as well as our shared national security. 

“We have a chance right now to pull all stakeholders – government, business and labor – together to forge a real, comprehensive strategy to protect and grow critical manufacturing here in the United States and Canada. Workers on the both sides of the border deserve to drive policy conversations about their livelihoods, not be pawns in a larger political discussion.”  

The International Association of Machinists and Aerospace Workers (IAM) is one of North America’s largest and most diverse industrial trade unions, representing approximately 600,000 active and retired members in the aerospace, defense, airlines, railroad, transit, healthcare, automotive, and other industries across the United States and Canada.

goIAM.org <https://www.goiam.org/> | @MachinistsUnion <https://twitter.com/MachinistsUnion>

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https://www.sierraclub.org/press-releases/2025/02/trump-got-it-wrong-energy-prices-will-increase-us-manufacturing-risk-due-new <https://www.sierraclub.org/press-releases/2025/02/trump-got-it-wrong-energy-prices-will-increase-us-manufacturing-risk-due-new> 
Trump Got It Wrong: Energy Prices Will Increase, US Manufacturing At Risk Due to New Tariffs 
U.S. Manufacturing, Pollution Accountability Absent From Trump’s Tariff Approach
February 3, 2025
Contact
Ginny Roscamp, Deputy Press Secretary, Sierra Club, ginny.roscamp at sierraclub.org

UPDATE: On Monday afternoon, Trump paused the tariffs in exchange for additional cooperation on border security,

Washington, DC – Over the weekend, U.S. President Donald Trump slapped an additional 25% tariff <https://www.nytimes.com/2025/02/02/us/politics/trump-tariffs-global-economic-order.html> on American importers of products from Canada and Mexico (except Canadian energy products, which will face a 10% tariff), and an additional 10% tariff on American importers of goods from China, all of which will go into effect tomorrow. Canada and Mexico have already vowed to retaliate <https://www.nytimes.com/live/2025/02/01/us/trump-tariffs-news#canada-mexico-china-trump-tariffs> with hundreds of billions of dollars more in tariffs. Having done nothing to prepare the U.S. economy, Trump’s tariffs will likely raise prices  <https://www.cnn.com/2025/02/01/economy/trump-tariffs-mexico-canada-china-increased-costs/index.html>on a range of essential goods including food, cars, and personal electronics. 

A blanket tariff against our three largest trading partners will not protect American workers, companies, or families. Instead, Trump’s tariffs will make it harder and more expensive for the U.S. to make and finish metals critical to building out clean energy infrastructure and supporting national defense. This weekend’s decision—especially coupled with Trump’s dangerous clean manufacturing law spending freeze <https://www.sierraclub.org/press-releases/2025/01/sierra-club-statement-trump-executive-order-freeze-unspent-ira-and-iija>—starts an expensive trade war with our allies, puts American manufacturing jobs on the line, and gives polluting countries like China more space to dominate the global marketplace. 

In response to the news, Sierra Club Executive Director Ben Jealous released the following statement:

“Donald Trump is again making the wrong move that puts even more pain on American families. The United States is demonstrating clean, billion-dollar, cutting-edge technologies to make aluminum and steel more efficiently, while some of our fiercest global competitors double down on pollution. Trump’s expensive trade war will hurt American workers and consumers by driving up costs to make clean American steel, aluminum, vehicles, and energy products. Instead of demanding that Americans pay more, Trump should support the policies that will grow domestic manufacturing, reduce costs, and help working families.”

Read more on the Sierra Club’s position on a smart approach to tariffs: “Tariffs Should Be a Scalpel, Not a Sledgehammer <https://www.commondreams.org/opinion/tariffs-scalpel-noths>”.

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