China has announced retaliatory tariffs of 15 percent on imports of coal and liquefied natural gas from the United States, following Washington’s decision to impose a 10 percent levy on Chinese goods. Beijing’s finance ministry also revealed new 10 percent duties on US crude oil, agricultural machinery, large-displacement vehicles, and pickup trucks.
The Chinese government stated that these measures were a direct response to the unilateral tariff increase imposed by the US over the weekend. On Saturday, President Donald Trump introduced sweeping trade actions against key partners, including Canada and Mexico, with additional levies on Chinese imports. Trump justified the move as a measure to curb illegal migration and drug trafficking, particularly the flow of fentanyl into the United States.
China, however, condemned the US decision, arguing that it seriously violates World Trade Organisation rules, does nothing to address its own problems, and disrupts normal economic and trade cooperation between China and the United States. The new Chinese tariffs are set to come into effect next Monday, shortly after Trump announced he would be speaking with President Xi Jinping within the next 24 hours.
Trump’s trade offensive also targeted Canada and Mexico, but both countries managed to negotiate last-minute deals to avoid immediate penalties. Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau agreed to stricter border measures to stem the movement of migrants and fentanyl into the US. In exchange, Trump granted a 30-day suspension of the proposed tariffs on their exports.
Following the reprieve, Asian markets rallied on hopes that similar negotiations could ease tensions between the US and China. However, investor optimism was dampened when Beijing unveiled its countermeasures, leading to a pullback in stock market gains. The global markets had already suffered on Monday after Trump’s threats of sweeping 25 per cent tariffs on Canadian and Mexican imports sparked fears of an escalating trade war.
Trump characterised his discussions with Sheinbaum as very friendly and agreed to halt the Mexican tariffs immediately. As part of the deal, Mexico pledged to deploy 10,000 troops to the US-Mexico border to help curb illegal crossings.
While tensions with Mexico appeared to ease, relations between the US and Canada remained strained. Despite two calls with Trudeau, Trump claimed on his social media platform, Truth Social, that Canada had misunderstood the plain language of his demands. The US president insisted that Trudeau had ultimately agreed to secure the northern border and take stronger action against fentanyl trafficking.
In response, Canada announced the deployment of nearly 10,000 officers to bolster border security, classified drug cartels as terrorist organisations, and appointed a “Fentanyl Czar” to oversee anti-drug efforts. The true extent of these changes remains uncertain, as Canadian officials previously reported having 8,500 personnel already stationed at the border.
Canada, China, and Mexico represent the United States’ largest trading partners, and the White House acknowledged extensive negotiations over the weekend. National Economic Council Director Kevin Hassett insisted that the situation was not a trade dispute but a drug war, dismissing concerns of economic fallout. However, US government data suggests that only a small fraction of illicit drugs enter the country from Canada.
