China imposed tariffs on a variety of U.S. products and launched an investigation into Google shortly after President Donald Trump announced a 10% tariff on Chinese goods, escalating trade tensions between the world’s largest economies. The State Administration for Market Regulation stated that it would probe the U.S. tech giant “in accordance with antitrust laws” but did not provide further details on the specific allegations. While Google’s search engine and internet services are blocked in China, the company continues to collaborate with local partners, including advertisers, to maintain a presence among Chinese users.
Beijing’s new tariff measures, which include a 15% levy on less than $5 billion of American coal and liquefied natural gas exports, were among the strongest yet and reflected the escalating tensions between the two countries. They come as the world’s top two economies struggle with rising protectionism and the slowing global economy.
China’s retaliation appeared carefully calibrated to avoid significant blowback on its economy while showing that President Xi Jinping could inflict damage on a wide range of fronts, including disrupting the key minerals supply chain and hurting US companies with significant operations on the mainland. That restraint, and Trump’s signal that he wants to speak with Xi over the next few days, led to a relatively muted reaction in markets.
On Tuesday, the last day of a weeklong Lunar New Year holiday, the Chinese government imposed new export controls on metals such as tungsten, tellurium, bismuth, and molybdenum. According to a ministry official, the new rules will prevent the unregulated transfer of those materials, which are used in electronic, aviation, and defense industries, into the country from other nations.
It also added Calvin Klein owner PVH Corp and gene sequencing firm Illumina Inc. to its list of untrustworthy entities, making it harder for them to do business in the country. The moves were in addition to China’s earlier announcement of new tariffs on American oil and agricultural equipment, its 15% levy on US coal, and the 10% fee on US energy exports.
The move came despite the White House saying it would allow for a one-month delay of the US 25% tariffs on Mexico and Canada after the leaders’ talks on Monday. The US has not announced any reprieve for the tariffs on Chinese goods, which will be in place unless there is a deal to avoid them. Experts warn that the US and China are the world’s biggest trading partners, and a prolonged trade war would hurt both sides significantly.
