China has heightened trade war tensions with the United States by extending existing tariffs imposed on a crucial chemical solvent, sanctioning seven American firms on security grounds and threatening to stop buying US semiconductors within a single day.
China’s Ministry of Commerce (MoC) announced on December 27 that it will continue to impose anti-dumping duties on n-butanol imports from the US, Taiwan and Malaysia for another five years, effective from December 29, 2024.
The MoC said removing the anti-dumping duties would likely lead to a resumption or continuation of dumping practices and subsequent harm to China’s domestic n-butanol industry.
N-butanol is a key organic chemical used in the production of various products including paints, adhesives and plasticizers.
On December 29, 2018, China imposed 52.2-139.3% tariffs on n-butanol imports from the US and 12.7-26.7% tariffs on those from Malaysia. A 56.1% duty was imposed on all Taiwanese firms, except Formosa Plastics Corp, which only paid 6%.
In 2022, China imported 105,400 tons (66% of total) of n-butanol from Taiwan and 37,300 tons (23.4% of total) from Saudi Arabia, according to a report published by the Beijing-based Huajing Industry Research Institute. The remaining came from Russia, South Africa and Malaysia.
The report said China’s N-butanol suppliers are lagging behind foreign competitors in product quality.
Arms sales to Taiwan
On Friday, the Chinese Foreign Ministry also sanctioned seven American companies and their relevant senior executives to retaliate against US arms sales to Taiwan.
Beijing said its sanctions, based on China’s Anti-Foreign Sanctions Law, are also a response to the United States’ National Defense Authorization Act for Fiscal Year 2025, which includes multiple negative sections on China.
It said the sanctioned companies will now have their assets in China frozen and are now barred from doing business with Chinese companies and people.
The seven firms include Insitu Inc, Hudson Technologies, Saronic Technologies, Raytheon Canada, Raytheon Australia, Aerkomm Inc and Oceaneering International Inc.
These firms are engaged in a wide range of industries. Insitu is a maker of unmanned aerial systems and a wholly-owned subsidiary of defense contractor Boeing. Aerkomm is a satellite communication technology company. Oceaneering offers products and robotic solutions to the offshore energy, defense, aerospace and manufacturing industries.
The latest round of Chinese curbs came after the Biden administration approved its 19th arms sales to Taiwan on December 20. The US$295 million deal included upgraded tactical data link systems and gun mounts for Taiwanese ships.
On November 29, the Biden administration approved new weapons sales worth $385 million to Taiwan, including spare parts for its US-made F-16 fighter jets and radar systems to be delivered in 2025.
On December 5, China sanctioned 13 US firms engaged in the manufacturing of drones, artificial intelligence and military communications, as well as six senior company executives.
“A series of actions shows that the US has not stopped trying to contain China’s development through the Taiwan issue,” a Shanxi-based military columnist using the pseudonym “Dianwutang” wrote in an article. “The promises of American politicians are of no value to us anymore.”
“China is becoming more and more mature in handling its conflicts with the US. If the US doesn’t move, China won’t take action, and if the US moves, China will strike with precision.”
He said the sanctioned US firms are now in limbo as they can’t obtain high-quality raw mineral materials such as gallium, germanium and antimony, from China. He said even if they can buy these materials via third countries, they will have to pay an extremely high price.
Stephen Tan, managing director of the International Policy Advisory Group, said in an online panel discussion on December 19 that China will definitely urge Trump to stop selling arms to Taiwan but he won’t compromise easily as a big fan of “you pay your own fees for your protection,” which will translate into a rise in US arms sales to Taiwan.
Fair competition?
On December 23, the US Trade Representative Office said it would launch a Section 301 investigation into China’s targeting of foundational semiconductors, or legacy chips, for dominance and the impact on the US economy.
China Council for the Promotion of International Trade (CCPIT), controlled by the Ministry of Commerce, said in a media briefing on December 27 morning local time that the US-initiated 301 investigation into China’s semiconductor industry is a clear example of trade protectionism.
Sun Xiao, a spokesperson for CCPIT, called on the US to comply with World Trade Organization (WTO) rules and immediately halt unilateral restrictions, and to promote industrial cooperation with China through dialogue and consultation.
He criticized the US for undermining fair competition principles by providing subsidies to its own semiconductor sector.
CCPIT did not elaborate on what actions it will take but it is apparently telling the US that China can stop buying US chips if needed. Earlier this month, several Chinese industry groups called on their members not to buy American-made legacy semiconductors due to “safety” concerns after the US unveiled new chip export controls against China.
Yong Jian is a contributor to Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.
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