China swiftly retaliated against new U.S. tariffs by announcing fresh tariffs on American imports, with levies of 15% on U.S. coal and 10% on crude oil, farm equipment, and some autos starting February 10. This move came right after a 10% tariff on all Chinese imports into the U.S. took effect. The actions by both countries escalate tensions between the top two global economies, reigniting a trade war that began in 2018 under President Donald Trump. Trump had offered temporary reprieves on tariffs to Mexico and Canada, citing concerns about illicit drug flows like fentanyl from China into the U.S., a claim disputed by Beijing.

China has labeled fentanyl as America’s issue and plans to challenge the tariffs at the World Trade Organization while keeping the door open for negotiations. The U.S. is a minor supplier of crude oil to China, accounting for just 1.7% of its imports last year. Analysts warn of the potential for more tariffs as the trade war unfolds, leading to a downgrade in China’s economic growth forecast by Oxford Economics. With both sides taking a firm stance, the future of trade relations between China and the U.S. remains uncertain, with implications for global markets and economic stability.