Days after US President Donald Trump raised tariffs on Chinese imports, China swiftly retaliated. Beijing announced additional duties on U.S. coal, liquefied natural gas (LNG), crude oil, farm equipment, and large-displacement vehicles.
As a result, China’s foreign ministry declared a 15% tariff on U.S. coal and LNG. Additionally, it imposed a 10% duty on crude oil, farm machinery, and certain cars. This move directly countered Washington’s 10% tariff on Chinese imports, which had taken effect earlier in the day.
Meanwhile, Beijing strongly criticized the U.S. decision. “The US’s unilateral tariff increase seriously violates the rules of the World Trade Organisation. It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the US,” the official statement said.
China Opens Anti-Trust Investigation Against Google
Moreover, China did not stop at tariffs. In a significant move, the State Administration for Market Regulation launched an anti-trust investigation into Google. However, authorities provided no further details. Even though Google’s search engine is blocked in China, the company remains active through partnerships with local advertisers.
Beijing Expands Trade Restrictions
In addition to tariffs and the Google probe, China introduced new trade measures. It imposed export controls on tungsten-related materials and added PVH Corporation, the owner of Calvin Klein, and Illumina Inc. to its unreliable entity list. Consequently, these measures signal tighter restrictions on foreign businesses operating in China.
Markets React as Currency Values Decline
As tensions escalated, financial markets responded immediately. The offshore yuan dropped 0.3% to 7.3340, Bloomberg reported. Since the onshore yuan market remained closed for the Lunar New Year holiday, traders closely watched offshore fluctuations.
Similarly, other currencies tied to China’s economy also declined. The Australian and New Zealand dollars both fell by at least 0.8%, reflecting investor concerns about rising trade tensions.
Trump Justifies Tariffs, Warns of Further Actions
Meanwhile, over the weekend, Donald Trump defended his aggressive trade policies. He accused Beijing of failing to prevent illegal drug flows into the U.S. and justified the new tariffs as necessary. Furthermore, he warned that if China continued to retaliate, the U.S. would increase tariffs even further.
As both countries remain firm on their stances, the trade war shows no signs of easing.