China has intensified its response in the ongoing trade war with the United States by adding PVH, the American company that owns renowned designer brands Calvin Klein and Tommy Hilfiger, to its "unreliable entity" list. This move marks a significant escalation in the trade tensions between the two global economic giants. Beijing's list, established in 2020 amidst mounting trade hostilities, serves as a retaliatory measure against the US, which maintains its own "entity list" restricting specific organizations from purchasing American products without governmental consent.
In addition to targeting PVH, China has imposed a 10% tariff on certain US goods, including agricultural machinery, pick-up trucks, and some large cars. Although China is not a major importer of American pick-ups and primarily sources its cars from Europe and Japan, this action underscores Beijing's strategy to counteract US tariffs.
The trade conflict between the US and China has escalated significantly, with both nations enacting measures against each other. China has introduced export controls on 25 rare metals, a critical area where it holds substantial influence by producing nearly 90% of the global refined output. Meanwhile, the United States has levied tariffs on all Chinese imports into the country, including a universal 10% tariff.
"China is hitting back in the same way President Trump is accusing Chinese companies. This is all part of the US-driven de-coupling of the US and China," – Prof Schotter
China's strategic response also includes increasing imports of liquefied natural gas (LNG) from the United States, with import volumes nearly doubling since 2018. This maneuver demonstrates China's adeptness at balancing its economic needs while sending a clear message to Washington. Despite being the world's largest LNG exporter, the US has diversified its customer base, including significant markets in the UK and European Union.
The ongoing trade war has impacted various sectors, with China's targeted goods representing approximately $20 billion worth of annual imports—about 12% of China's total imports from the US. However, experts note that this sum pales in comparison to the more than $450 billion worth of Chinese goods targeted by US tariffs.
"This is a far cry from the more than $450bn worth of Chinese goods being targeted by the US." – Julian Evans-Pritchard
China's actions appear to be strategically calibrated to convey a message to both the US and domestic audiences without causing excessive harm to its own economy. The inclusion of PVH on the "unreliable entity" list exemplifies this approach, as it allows Beijing to assert its stance while minimizing potential repercussions.
"Clearly been calibrated to try to send a message to the US [and domestic audiences] without inflicting too much damage" – Prof Schotter
In another significant move, China has announced an anti-monopoly investigation into US tech giant Google. While Google's search services have been blocked in China since 2010, this investigation highlights Beijing's willingness to scrutinize American corporations operating within its borders.
Moreover, China remains the world's largest importer of coal, although it sources most of it from Indonesia. This diversification underscores China's effort to mitigate reliance on US imports in certain sectors while maintaining strategic partnerships with other countries.
The unfolding trade dynamics between China and the US reflect an intricate interplay of economic interests and geopolitical strategies. Both nations are leveraging their respective strengths and weaknesses as they navigate this complex landscape. The imposition of tariffs and other trade barriers underscores a broader trend toward economic decoupling between these two global powerhouses.
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