Trump's tariffs: China strikes back with levies of up to 15%
Published February 4, 2025last updated February 4, 2025What you need to know
- China announced new tariffs minutes after 10% US tariffs on China took effect Tuesday
- Chinese tariffs on a range of US goods go into effect on February 10
- US President Donald Trump struck last-minute deals with leaders of Canada and Mexico to delay tariffs
- European Union leaders warn against trade war with US
The live updates are now closed. Here's a roundup of headlines from Donald Trump's first days in office, on Tuesday, February 4:
No news on Trump talk with China's Xi amid tariff battle
The White House said that it was unclear when a planned telephone call between US President Donald Trump and Chinese counterpart Xi Jinping would take place.
Talks were postponed on Tuesday, despite both countries imposing tariffs on each other's goods.
Leavitt said she had "no updates" on when a call between Trump and Xi will take place.
"He is not going to allow China to continue to source and distribute deadly fentanyl into our country, that was the reason for this tariff," said White House Press Secretary Karoline Leavitt, referring to the potent synthetic opioid, the base chemicals for which are sourced in China.
US President Donald Trump told reporters at the White House that he was in "no rush" to talk to his Chinese counterpart Xi Jinping.
Trump earlier delayed tariffs on Mexico and Canada after speaking with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
Trump-Xi call delayed
Donald Trump and Xi Jinping will not be speaking on Tuesday.
The US president said he was in "no rush" to speak with China's Xi to his Chinese counterpart.
Earlier White House trade adviser Peter Navarro said the conversation would take place on Tuesday.
"It is being scheduled and will happen very soon," White House Press Secretary Karoline Leavitt said.
This comes after both countries slapped tariffs on one another in an escalating trade war.
Beijing announced levies on imports of US energy, vehicles, and equipment in response to the sweeping duties on Chinese imports imposed by Trump.
Rubio questions aid groups' actions post US funding freeze
US Secretary of State Marco Rubio insinuated that some aid groups might have purposely harmed their projects to make a point after the Trump administration suspended almost all foreign aid.
Rubio issued a waver last week to aid groups providing lifesaving assistance.
"if it's providing food or medicine or anything that is saving lives and is immediate and urgent, you're not included in the freeze," Rubio told reporters during a visit to Costa Rica. "I don't know how much more clear we can be than that," he said.
He blamed some aid groups, without providing evidence, of intentionally sabotaging projects.
"I would say if some organization is receiving funds from the United States and does not know how to apply a waiver, then I have real questions about the competence of that organization, or I wonder whether they're deliberately sabotaging it for purposes of making a political point," Rubio said.
Trump and Xi expected to talk soon
White House trade adviser Peter Navarro says US President Donald Trump is set to speak to Chinese President Xi Jinping on Tuesday.
The conversation is slated for hours after both countries slapped tariffs on one another in an escalating trade war.
Beijing announced levies on imports of US energy, vehicles and equipment in retaliation to Trump's threatened 10% tariffs on Chinese goods coming into effect.
The US president suspended tariffs on Mexico and Canada on Monday for a month after they said they would step up measures to counter flows of the drug fentanyl and undocumented migrants into the US.
Stock markets wobbled as investors prepared for volatile market activity in the coming weeks over Trump's threatened levies on the US's three biggest trading partners.
"Let's see what happens with the call today," Navarro told news outlet Politico.
When asked if Trump could also stop the tariffs on China, he added: "It's up to the boss. I never get ahead of the boss, that's why I'm sitting here."
Mexico begins troop deployment to US border
Mexico has begun its promised deployment of troops to the Mexican-US border, President Claudia Sheinbaum said.
"The deployment has already started," she told reporters on Tuesday.
Spanish news agency EFE reported that 800 National Guards left Cancun in Mexico's southeast headed for the Mexican state of Sonora, which borders Arizona.
Sheinbaum promised to send 10,000 National Guards to the border as part of a last-minute deal with Trump to avoid 25% tariffs on Mexican goods.
The troops are to help curtain illegal migration and drug smuggling into the US, especially of the drug fentanyl.
Speaking at a press conference, Sheinbaum said National Guards had been taken from parts of the country that "do not have as much of a security problem."
The US border deployment "does not leave the rest of the country without security," the president said.
South Africa's Ramaphosa speaks to Musk about 'land confiscation' claims
President Cyril Ramaphosa has spoken to Elon Musk about misinformation surrounding South Africa.
The call came after US President Donald Trump threatened on Sunday to suspend aid to South Africa over its land reform policy. Trump accused South Africa of confiscating land and badly treating "certain classes of people".
In the call with Musk about "issues of misinformation and distortions", Ramaphosa stressed his country's "constitutionally embedded values of the respect for the rule of law, justice, fairness and equality," South Africa's presidency wrote on X, formerly Twitter, on Tuesday.
Before details of the call were announced, Ramaphosa had strongly rejected Trump's claim, saying that his government hadn't confiscated any land, and the land reform was aimed at ensuring equitable public access to land.
Musk, a prominent Trump ally who was born in South Africa, has accused its government of having "openly racist ownership laws", suggesting white people were the victims.
'Engage the Americans, travel there and talk': Former NATO chief Stoltenberg
Former NATO chief Jens Stoltenberg, who became Norway's new finance minister on Tuesday, said engaging with the Trump administration was key to avoiding tariffs.
The European Union is bracing for a potential transatlantic trade war after US President Donald Trump repeated he would "absolutely" put "substantial" tariffs on goods coming from EU countries.
Stoltenberg said his main advice was to "spend time engaging them [the Americans], travel there and talk with the administration, like we did with NATO."
Speaking to reporters as he took up his Finance Ministry post, Stoltenberg added that Norway is going to do "everything it can" to avoid tariffs being imposed on it.
Stoltenberg was the NATO secretary general for a decade, including during Trump's first term, before stepping down in October 2014.
Stoltenberg is widely perceived as playing a decisive role in keeping Trump from withdrawing from the alliance.
Europe ready for tariff talks with US, says European Commission head Ursula von der Leyen
European Commission President Ursula von der Leyen on Tuesday said the EU is ready for tough negotiations with US President Donald Trump, who has promised to level tariffs on the bloc, claiming allies are "ripping off" the US with "atrocious" tariffs on US imports.
"Our first priority is now to work on the many areas where our interests converge, from critical supply chains to emerging technologies. To work out any grievances and to set the foundations for a stronger partnership," said von der Leyen.
"We will be open and pragmatic in how to achieve that. But we will make it equally clear that we will always protect our own interests — however and whenever that is needed," she added.
Addressing relations with another major EU trade partner, von der Leyen suggested that although the bloc would continue to "de-risk" its economic ties with China, there was still ample room for constructive engagement.
EU trade ministers will meet in Warsaw, Poland, today, where they will discuss possible responses to Trump's economic arm-twisting.
Whereas individual countries are clearly affected by tariffs, EU trade policy is set by the European Commission, the Council of the European Union (which consists of representatives from the member states) and the European Parliament. The European Commission is then responsible for all trade negotiations on the 27-member bloc's behalf.
Germany's DAX stabilizes after tariff delay
Germany's DAX stock index stabilized Tuesday on news of delays to the implementation of US tariffs on Canada and Mexico.
The DAX gained 0.2% after it dropped sharply Monday over fears of a full-blown trade war. Other indexes around the world had dropped as well, but Germany sees its export-based economy as being exceptionally vulnerable in the event of a global trade crisis.
Market analysts say that although the recovery is good news, the future remains uncertain with Trump threatening to clobber the EU with tariffs soon, too.
China answered Trump's 10% US tariffs by announcing that it would up the ante to level 15% tariffs on US liquefied natural gas and coal.
Booze giant Diageo slashes sales targets over Trump tariffs
Diageo, the world's largest spirits maker, on Tuesday announced that, "given the current macroeconomic and geopolitical uncertainty in many" key markets, it is cutting its target of 5-7% sales growth.
Diageo CFO Nik Jhangiani estimated that second-quarter operating profits could shed as much as $200 million (€194 million) if US tariffs threatened by Donald Trump go into effect on Canada and Mexico in March.
Those tariffs would directly affect the manufacture and sale of Tequila, which must be made in Mexico, and Canadian whisky.
Diageo CEO Debra Crew said Trump's tariffs would negatively impact "everyone supporting the US hospitality industry."
The US makes up a full 45% of Diageo's market.
CEO Crew said the company's estimates were based on the current situation and had not factored in future retaliatory measures from any of the countries involved in the trade spat, adding that the situation made it impossible to give clearer guidance on future earnings.
China says US tariffs seriously violate WTO global trade rules
China has slammed the new US tariffs, saying they are in violation of global trade rules.
"The US's unilateral tariff increase seriously violates the rules of the World Trade Organization," the Chinese Ministry of Finance office said. "It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the US."
On Sunday, China vowed to file a legal against the US at the WTO for its 10% tariffs on the country, a move that was regarded as being largely symbolic because the WTO's dispute settlement system has been effectively shut down since Trump blocked the appointment of judges to handle appeals in 2019 amid another tariff war with China.
On Tuesday morning, China announced 15% tariffs on coal and LNG imports from the US, and 10% tariffs on crude oil, agricultural machinery, big-engined vehicles and pickup trucks.
China is the world's largest liquefied natural gas (LNG) importer. Although the US is the world's biggest LNG exporter, Beijing relies on supplies primarily from Australia, Qatar and Malaysia.
In 2023, US LNG exports to China stood at roughly 2.3% (173,247 million cubic feet) of total natural gas export volumes, according to the US Energy Information Administration.
China says it will probe Google over alleged antitrust violations
China announced a probe into US tech giant Google over what it claimed were violations of Beijing's anti-monopoly and antitrust laws.
The country's Administration for Market Regulation said it would launch an investigation into the US tech giant because of alleged violations of "the Anti-Monopoly Law of the People's Republic of China." No details on the allegations were given.
Google and many of its services are blocked in mainland China, where a "Great Firewall" blocks any politically sensitive content and by extension makes the majority of Western-developed software and applications unavailable.
China's announcement followed Beijing's tariffs on select US goods.
What to know about US-China trade relations
The United States is China's biggest trade partner.
Trade between the two countries surged for over 20 years after China became a part of the World Trade Organization (WTO) in 2001.
There were hopes that integration into the US-led global economy and economic prosperity could usher in political liberalization in China, which did not happen.
The relationship took a turn during US President Donald Trump’s first term in the Oval Office when he launched a trade war with Beijing in 2018 to manage trade imbalances.
The brutal trade battle saw tit-for-tat tariffs on hundreds of billions of dollars worth of goods disrupting global supply chains and damaging the world economy.
US dollar rises, as China tariffs kick in
The dollar rallied on Tuesday after US tariffs on Chinese goods came into force, triggering a selloff in the Chinese yuan and the Australian dollar.
The Chinese yuan fell around 0.3% in offshore trading, but was up from the low it saw overnight.
There is no official yuan trading until Wednesday, with mainland markets still closed for the week-long Lunar New Year holidays.
The Canadian dollar and Mexican peso also suffered despite winning a reprieve from their own US tariffs.
They both, along with the euro, saw their value fall 0.4% against the dollar on Tuesday.
What to know about Trump's trade fight with Mexico and Canada
The new tariffs imposed by China in response to a 10% US levy on Beijing come after the US paused the implementation of planned tariffs on imports from Canada and Mexico.
Mexico
US President Trump confirmed that the 25% tariffs on Mexico and Canada would be paused for 30 days following steps taken by both of those countries to prevent the trafficking of opioid fentanyl into the US.
Trump spoke to Mexican President Claudia Sheinbaum on Monday morning, saying the two had "agreed to immediately pause the anticipated tariffs for a one month period" as both countries open talks on border security and trade.
The Mexican president also announced she would immediately send 10,000 soldiers to her northern border to curb the flow of fentanyl shipments and illegal migrants into the US. The vast majority of fentanyl seized at the US border comes from Mexico.
Canada
After speaking with the Mexican president, Trump spoke twice with Canadian Prime Minister Justin Trudeau.
The Canadian leader had warned over the weekend that his country would impose 25% retaliatory tariffs on US goods, making clear that it would move to do so reluctantly. "We don’t want to be here," Trudeau told people in an emotional televised address from Ottawa.
Canada on Sunday also published a list of all US imports that would face new tariffs, including food and garments.
Trudeau then announced the pause Monday after speaking with Trump, writing, "I just had a good call with President Trump."
"Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl," the prime minister wrote.
"In addition, Canada is making new commitments to appoint a Fentanyl Czar," he added.