China's strategic response to US tariff actions
Date of publication: February 6th, 2025
On February 1, 2025, the US government announced a 10% tariff on all imports of Chinese goods into the US, citing issues related to fentanyl and other concerns. This decision has raised discussions by China about the actions alignment with World Trade Organization (WTO) rules and potential impact on economic and trade relations between China and the US.
Harmonized schedule (HS) - Tariff details
In response, the Chinese government, under the approval of the State Council and in accordance with various national laws and international principles, has decided to impose additional tariffs on certain imported goods originating from the United States. This decision is outlined in Announcement No. 1/2025 and will take effect from February 10, 2025. The future date was chosen to allow a short period for discussions between the US and China to see if an agreement could be reached to possibly remove or limit the US tariffs. The details are as follows:
1. 10% Tariff
S.no | HS Code | Description |
|---|---|---|
1 | 2709 | Crude Oil |
2 | 8419 | Machinery, plant or laboratory equipment, whether or not electrically heated for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilising, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; |
3 | 8424 | Mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; |
4 | 8432 | Agricultural Machinery |
5 | 8433 | Harvesting or threshing machinery, including straw or fodder balers |
6 | 8434 | Milking machines and dairy machinery |
7 | 8436 | Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment |
8 | 8437 | Machines for cleaning, sorting or grading seed, grain or dried leguminous vegetables |
9 | 8438 | Machinery, not specified or included elsewhere in this chapter, for the industrial preparation or manufacture of food or drink, other than machinery for the extraction or preparation of animal or fixed vegetable fats or oils |
10 | 8479 | Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter |
11 | 8701 | Tractors |
12 | 8703 | Large-Displacement Cars |
13 | 8704 | Pickup Trucks |
14 | 8716 | Trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof |
2. 15% Tariff
S.no | HS Code | Description |
|---|---|---|
1 | 2701 | Coal |
2 | 2702 | Lignite, whether or not agglomerated, excluding jet |
3 | 2711 | Liquefied Natural Gas (LNG) |
The list of imported goods originating from the United States will have the corresponding tariffs levied in addition to the current applicable tariff rates. The existing bonded and tax reduction and exemption policies will remain unchanged, and the additional tariffs will not be reduced or exempted.
This move by China aims to address the economic challenges posed by the recent US tariff imposition and to protect its own economic interests. It emphasizes the importance of adhering to international rules and maintaining fair trade practices on both sides.
Additions to the unreliable entity list
The Chinese government has also announced the inclusion of following Entities from the United States under China Unreliable Entity List:
1. PVH Group (parent company for multiple brands including Calvin Klein and Tommy Hilfiger)
2. Illumina Inc.
China’s reason for adding these two U.S. companies to its Unreliable Entity List is because they disrupted normal business activities with Chinese firms. The companies are believed to have treated Chinese companies unfairly, which harmed their rights and interests. As a result, China is taking steps to protect its businesses and ensure fair treatment in international trade.
Additional export controls on rae minerals
In addition to tariff changes, and additions to the Unreliable Entity List, the Chinese government, under the relevant provisions of Trade and Customs Law, added 36 new entries in Export Control of Dual-Use Items List to safeguard national security interests and fulfil international obligations such as non-proliferation. This decision is outlined in Announcement 10/2025, imposes export licensing requirements on rare minerals. The primary focus is on five categories of controlled items.
A. Tungsten (W) related items, including controlled technology
B. Tellurium (Te) related items, including controlled technology
C. Bismuth (Bi) related items, including controlled technology
D. Molybdenum (Mo) related items, including controlled technology
E. Indium (In) related items, including controlled technology
These new ECN entries are published with HS correlations and description in various categories classified as special materials, electronics and sensors & lasers.
Conclusion
Recognizing the importance of these changes for our clients, we have already made them available on ONESOURCE Global Trade Content. Clients can check Additional Duty under the product Customs Import and Export Tariff of China. Designated entities are available in content for client’s screening, and rare minerals control items are addressed within the ECN solution.
To learn more about how the ONESOURCE Global Trade suite of tools and services can help businesses analyze potential impacts, explore alternative sourcing options, and optimize their trade operations to mitigate risks and capitalize on potential advantages, please contact your Account Manager or Customer Success Manager.