CHINA RETALIATES: Tariff lawyers expect additional tariffs on China in the near future
On February 4, 2025, China unveiled a program of new tariffs and import controls on the United States, in response to tariffs placed by the US on China which came into effect that day.
On February 1, 2025 President Trump signed three executive orders (“EOs”) declaring a national emergency in relation to the elicit trade of drugs into the United States from China, Canada, and Mexico. The tariffs, 25% on Mexico and Canada, and 10% on China, were scheduled to become effective on February 4, 2025. That same day, after consultations with President Trump, the heads of state of Mexico and Canada agreed to enhance border security along their boundary with the United States, which resulted in tariffs being postponed for another month. As of this writing, a meeting is scheduled between President Trump and President Xi Jinping at an undisclosed time. Until then, the EO’s tariffs have come into effect.
China’s response was to place a 15% tariff on US energy resource exports as well as a 10% on cars and agricultural machinery. Additionally, China expanded its scheme of export controls for critical minerals, which it began in December of last year. Finally, China has begun the dispute settlement process at the World Trade Organization, the treaty body of the General Agreement on Tariffs and Trade (“GATT”).
GATT dispute resolution is unlikely to succeed, as the Trump and Biden administrations crippled the appeals process by refusing to appoint judges to the appellate body.
The most important effect of these retaliatory tariffs is that the trade community can now anticipate additional tariffs on China in the near future. Section 2(c) of the February 1 EO reads:
Should the PRC retaliate against the United States in response to this action through import duties on United States exports to the PRC or similar measures, the President may increase or expand in scope the duties imposed under this Executive Order to ensure the efficacy of this action.
Therefore, in the coming days, we can expect to see heightened tariffs from the United States on goods coming from China.
Given that Canada and Mexico have already come to a partial understanding with the United States on these issues, President Trump’s meeting with President Xi seems hopeful. However, stay vigilant for updates as the situation continues to develop.
As new tariff regulations continue to evolve, navigating these changes requires experienced legal counsel. At Liang + Mooney, PLLC, our seasoned tariff lawyers can answer your questions and concerns with sophisticated legal solutions. If you seek strategic counsel and insight into how these changes could affect your operations, we invite you to contact us to schedule a consultation.