China retaliates against US tariffs with countermeasures & Google investigation

Xi counters Trump

China’s Ministry of Commerce announced on Tuesday that it is imposing counter-tariffs on various US products while launching a trade-related investigation into Google. The decision follows President Donald Trump’s 10% tariff on Chinese goods, reigniting tensions between the world’s largest economies.

New Chinese tariffs on US goods

China has implemented the following tariff increases:

• 15% tariff on coal and liquefied natural gas (LNG).
• 10% tariff on crude oil, agricultural machinery, and large-displacement cars.

In a statement, China accused the US of violating World Trade Organization (WTO) rules, stating:

“The US’s unilateral tariff increase seriously violates WTO regulations. It does not solve its own problems and damages normal economic and trade cooperation between China and the US.”

China’s trade retaliation & Google investigation

In addition to tariffs, China’s State Administration for Market Regulation announced a probe into Google for alleged antitrust violations.

• The timing of this announcement, just minutes after Trump’s new tariffs took effect, signals a strategic countermeasure by Beijing.

Additional Chinese measures announced

• Export control on tungsten-related materials.
• Addition of PVH Corp. (owner of Calvin Klein) and Illumina Inc. to an “unreliable entity” list.

Impact on global markets & currencies

• The offshore yuan weakened by 0.3%, dropping to 7.3340 amid rising trade tensions.
• China’s trade proxies, the Australian dollar, and the New Zealand dollar fell by at least 0.8%.

Trump’s tariff strategy & retaliation clause

Over the weekend, Trump ordered a blanket 10% tariff on Chinese exports, citing Beijing’s failure to curb the flow of illegal drugs.

• His orders included retaliation clauses, allowing for further tariff increases if China responded in kind.
• Trump is expected to discuss trade issues with Chinese President Xi Jinping in the coming days.

Trade war escalation continues

With both countries ramping up tariffs and China investigating a major US tech firm, the US-China trade war shows no signs of de-escalation. The latest moves indicate a deepening economic standoff, affecting markets, industries, and global trade dynamics.

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