China to impose tariffs of 34% on all US goods from Apr 10
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BEIJING: China on Friday (Apr 4) announced a slew of additional tariffs and restrictions against US goods as a countermeasure to sweeping tariffs imposed by US President Donald Trump.
The commerce ministry said it would impose additional tariffs of 34 per cent on all US goods from Apr 10.
Agriculture trade took another hit as Chinese customs imposed an immediate suspension on imports of sorghums from grain exporter C&D (USA) Inc, as well as poultry and bonemeal from three US firms.
Beijing also announced controls on exports of medium and heavy rare-earths, including samarium, terbium, dysprosium, lutetium, scandium, gadolinium - commonly used in MRIs - and yttrium - used in consumer electronics - effective Apr 4.
"The purpose of the Chinese government's implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfill international obligations such as non-proliferation," the commerce ministry said in a statement.
China produces around 90 per cent of the world's refined rare earths, a group of 17 elements used across the defence, electric vehicle, clean energy and electronics industries. The United States imports most of its rare earths, and most come from China.
The move, which affects exports to all countries, not just the US, is the latest demonstration of China's ability to weaponise its dominance over the mining and processing of the critical minerals.
Following the announcement of Beijing's counter-tariffs, Trump goaded China, saying the US rival had "panicked" in response to his global trade war.
"China played it wrong, they panicked - the one thing they cannot afford to do!" Trump posted on Truth Social, writing the entire message in his trademark all-caps.
China's commerce ministry also added 16 US entities to its export control list, which prohibits the export of dual-use items to affected firms.
Another 11 US firms were added to the "unreliable entities" list, which allows Beijing to take punitive action against foreign entities. The targeted firms includes Skydio Inc and BRINC Drones over arms sales to democratically governed Taiwan, which China claims as part of its territory.
The commerce ministry said the targeted companies seriously "undermined" China's national sovereignty, security and development interests and would be prohibited from new investments, import and export activities in China.
It also launched an anti-dumping probe into imports of certain medical CT tubes from the US and India, and a wider industry competitiveness investigation into imports of medical CT tubes.
China will also file a lawsuit with the World Trade Organization (WTO) over tariffs, the ministry said.
US President Donald Trump ignited a potentially ruinous global trade war this week by imposing 10 per cent levies on imports from around the world and harsh extra duties on key trading partners.
Trump unveiled particularly stinging tariffs of 34 per cent on China, one of its largest trading partners, on top of existing levies, bringing the total new levy to 54 per cent.
China swiftly vowed "countermeasures" to protect its rights and interests.
"Full-blown export restrictions on high-performance rare earth magnets containing dysprosium and/or terbium will hit foreign industries and defense sectors hard, creating a scramble for access to the limited sources of alternative supply - namely in Japan and South Korea," said Ryan Castilloux, founder of consultancy Adamas Intelligence.
"In the near-term, importers are holding their breath waiting to see if they will be impacted. The cannons have been loaded but so far no one knows where they’re aimed."
Beijing previously responded to tariffs imposed by the Trump administration earlier this year, announcing 10 to 15 per cent tariffs on fuel and US agricultural products like soybeans, wheat and chicken.
It has already imposed outright bans on the export of three metals to the US and slapped export controls on many others.
The moves to restrict heavy rare earths are especially important because China has even tighter control over these elements, said David Merriman at consultancy Project Blue.
"There is currently only one HREE (heavy rare earth element) focused operation outside of China, Myanmar and Laos," he said, adding that China has close involvement in supply chains from Myanmar and Laos.
That mine, Serra Verde in Brazil, is currently shipping its product to China for processing, Merriman added.
GALVANISE WEST
Friday's move is likely to galvanise efforts in the West to build alternative supply chains, according to Mercator Institute for China Studies analyst Jacob Gunter.
"The more China pulls this trigger, even if it's limited to the United States, this will cause European companies and European governments and other countries and their governments to also think about, what's the risk of us also having these export controls put on us?"
Roughly three-quarters of the rare earths the US imports came from China between 2019 and 2022, according to the US Geological Survey.
While the export controls stop short of an outright ban, Beijing can throttle shipments by restricting the amount of export licenses it issues. China had exported no antimony to European Union countries as of March after imposing export controls on the metal last September.
While common in the earth's crust, China dominates the complex and dirty refining process for rare earths and controls mining and output via a quota system that it has progressively tightened.
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