China strikes back: Tariffs and antitrust probe on US giants as trade war intensifies

BEIJING: China slapped tariffs on a range of US products and announced a probe into Google moments after President Donald Trump imposed a 10% tariff on goods from Beijing, reigniting a trade war between the world’s largest economics.

China will investigate the US tech giants for alleged antitrust violations, according to a Tuesday statement from the State Administration for Market Regulation. Beijing hit US coal and liquefied natural gas exports with a 15%b levy and targeted its oil and agricultural equipment with a 10% fee.

Authorities have put Calvin Klein owner PVH Corp. and US gene sequencing company Illumina Inc. onto a so-called blacklist of entities, as well as imposing new export control on tungsten-related materials.

“The US’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organisation,” China’s Finance Ministry said in a statement announcing tariffs. “It is not only unhelpful in solving its own problems, but also undermines the normal economies and trade cooperation between China and the US.”

The dollar rebounded after the news, while the offshore yuan extending its loss to 0.3% and the currencies of Australia and New Zealand, which have strong trade links to China, slid almost 1%. Other Asian currencies like the Thai baht and the Indonesian rupiah pared their gains.

China’s response was ‘measured and appropriate,” according to Dylan Loh, assistant professor politics at Nanyang Technological University in Singapore.

“It allows Beijing to be seen as doing something, without exactly reacting in a manner that would be seen as inviting further retaliation,” he added. “The responses are measured and appropriate. I think Beijing also sees what Canada and Mexico did, and know that they can still come to some sort of understanding.”

Also read: Trump pauses tariffs on Mexico and Canada, but not China

President Xi Jinping’s government swung back with its retaliation almost immediately after US tariffs came into force. That action dashed hopes that Beijing would reach a deal to avoid the tariffs, after Trump said he would speak to Xi soon. The Republican hours earlier granted Canada and Mexico a last-minute reprieve from a 25% tariff following leader talks.

Beijing retaliation looks targeted to send Trump a warning without hurting its own access to important commodities. The US supplied about 6% of China’s LNG imports last year, according to ship-tracking data. China imports little coal from the US Google’s search and internet services for consumers have been unavailable in China since 2010, although the company retains operations in the country, primarily around its advertising business.

China is the largest producing country of tungsten, accounting for about 80% of the global production. Tungsten known for its remarkable density and high melting point, acts as a buffer against intense temperatures and is most commonly used in armour-piercing missiles in the defense industry.

PVH is also the parent of Tommy Hilfiger and has been under Chinese regulatory investment since September for allegedly boycotting cotton from the Xinjiang region, though the statement did not mention the issue. Illumina is the leading global provider of genetic sequencing, and a rival to Chinese biotech giant BGI Genomics Co.

Trump over the weekend ordered a blanket levy on Chinese exports to take effect after midnight on Tuesday in the US, for what he calls Beijing’s failure to prevent the flow of illegal drugs. The orders included retaliation clauses that would increase tariffs if the countries responds in kind.

A more aggressive response from Beijing would risk a spiralling of US-China relations that had been on a more stable footing since President Xi Jinping and then US leader Joe Biden sat down in San Francisco in November 2023.