China retaliates against US tariffs with trade barriers and Google investigation
text_fieldsBeijing/Washington: The ongoing US-China trade conflict escalated further as China imposed retaliatory tariffs and launched an anti-trust investigation into Google, following new trade levies introduced by the Trump administration.
The US imposed a 10% tariff on Chinese imports on Tuesday, prompting an immediate response from Beijing.
China’s finance ministry announced tariffs of 15% on US coal and liquefied natural gas (LNG), along with 10% tariffs on crude oil, farm equipment, large-displacement vehicles, and pickup trucks.
Additionally, China’s commerce ministry and customs administration declared export controls on key minerals, including tungsten, tellurium, ruthenium, and molybdenum, citing the need to protect national security interests.
In a further blow to US companies, Beijing placed PVH Group and Illumina Inc on its "unreliable entity list", subjecting them to possible trade restrictions and penalties. PVH owns well-known brands like Tommy Hilfiger and Calvin Klein, while Illumina is a biotech company specialising in genomic sequencing that has recently collaborated with Nvidia on AI-driven healthcare projects.
China also launched an anti-trust investigation into Google, raising concerns over its operations in the country.
China strongly criticised the US decision to impose unilateral tariffs, calling it a violation of World Trade Organization (WTO) regulations. In its official statement, China’s finance ministry argued that the US move would not resolve its economic challenges but instead harm trade cooperation between the two nations.
Meanwhile, the Trump administration removed a key exemption for Chinese exports, meaning that shipments valued under $800 - a loophole previously exploited by retailers like Shein and Temu - will now face tariffs.
While tensions with China intensified, Trump delayed tariffs on Mexico and Canada, following last-minute negotiations.
After a call with Mexico’s President Claudia Sheinbaum, Trump postponed a 25% tariff on Mexican imports. In return, Mexico pledged to deploy 10,000 troops to its border with the US.
Canada’s Prime Minister Justin Trudeau also secured a temporary tariff exemption by unveiling a $1.3 billion border security plan. This includes appointing a fentanyl czar, designating cartels as terrorist organizations, and boosting 24/7 surveillance at the border.
Despite concerns about potential economic fallout, Trump defended the tariffs, claiming they were a “powerful tool” to boost the US economy.
“Every country wants to make a deal with us,” he told reporters in the Oval Office. Acknowledging the possible economic strain, he admitted there could be "some pain" but insisted it was necessary to “Make America Great Again.”
Stock markets reacted unevenly to the escalating trade tensions.
Hong Kong’s Hang Seng index surged by 2.8%, while South Korea’s Kospi rose 1.3%. London’s FTSE 100 dropped 31 points to 8,551 after opening. The British pound weakened against the US dollar to $1.24, while the euro slipped to $1.03. The Canadian dollar, which hit a 20-year low on Monday, depreciated further to 1.445 against the US dollar.
Meanwhile, Chinese markets remained closed for the Lunar New Year holiday and are set to reopen on Wednesday.
As tensions mount, Trump is expected to speak with China’s President Xi Jinping later this week, while Beijing has vowed to take further countermeasures and file a legal case against the US at the WTO.
Economists are warning that these trade measures could drive up costs for American consumers.