China has announced a series of countermeasures in response to President Donald Trump’s recent tariffs on Chinese goods. This includes imposing tariffs on selected U.S. imports and initiating an antitrust investigation into Google. The measures were unveiled shortly after the U.S. tariffs were set to take effect, marking a significant escalation in the ongoing trade tensions between the two nations.
As part of its retaliation, China will impose a 15% tariff on coal and liquefied natural gas, as well as a 10% tariff on crude oil, agricultural machinery, and large-engine vehicles imported from the United States. These tariffs are scheduled to take effect next Monday. The State Council Tariff Commission of China criticized the U.S. actions, claiming they violate World Trade Organization rules and disrupt normal economic relations between the two countries.
This latest round of tariffs is reminiscent of the trade war that began in 2018, when Trump first imposed tariffs on Chinese imports, prompting China to respond in kind. Analysts suggest that China is now better equipped to handle the repercussions of these trade disputes, having developed a broader range of countermeasures that affect various sectors of its economy.
In addition to tariffs, China has also announced export controls on critical minerals essential for high-tech products, including tungsten, tellurium, bismuth, molybdenum, and indium. These minerals are vital to U.S. economic and national security, and the controls represent a strategic move by China to exert pressure on the U.S. economy.
The impact of these tariffs on U.S. exports may be limited, as the U.S. does not export a significant amount of liquefied natural gas to China, accounting for only about 2.3% of total natural gas exports in 2023. Furthermore, China’s car imports are predominantly from Europe and Japan, with only about 700,000 vehicles imported overall last year.
In a related development, China’s State Administration for Market Regulation has launched an investigation into Google, suspecting violations of antitrust laws. This announcement came just minutes after the U.S. tariffs were announced, although Google has a minimal presence in China due to its search engine being blocked since 2010.
Moreover, two American companies, PVH Group and Illumina, have been placed on China’s unreliable entities list, which could restrict their ability to operate in China. This action follows an investigation into PVH Group concerning its practices related to Xinjiang cotton.
Experts warn that these developments could lead to a renewed trade war, potentially resulting in economic slowdowns and increased inflation in the U.S. The global market is bracing for possible repercussions as both nations navigate this volatile economic landscape.