In retaliation to President Donald Trump’s tariffs, China took swift action on Tuesday by imposing tariffs on a range of US goods and announcing an antitrust investigation into Google.
Trump recently signed an executive order imposing a 25% tariff on all Canadian and Mexican imports, with a lower 10% rate on Canadian energy products. Included here is imposing a 10% tariff on Chinese goods. However, the White House granted Canada and Mexico a 30-day delay to address border security and drug trafficking concerns, leaving China as the principal target of the president’s trade crackdown.
China’s State Council Tariff Commission has unveiled a 15% tariff on American coal and LNG in retaliation, along with a 10% levy on crude oil, agricultural machinery, and large-engine automobiles.
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“The unilateral tariff increase seriously violates the rules of the World Trade Organization,” the council remarked. “It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the U.S.”
Although the US is a leading exporter of LNG worldwide, it exports relatively little to China—just over 2% of total LNG exports, according to the EIA.
Analysts, however, noted that this round of retaliation seems to have been made with balance of caution, pointing out that China appears to having learned from previous tariff exchanges in 2018 and is now more precise in its response.
The State Administration for Market Regulation also announced an antitrust investigation into Google. While the tech giant’s core search products are blocked in China, its Android operating system underpins many smartphones made by Chinese manufacturers.
Google, which largely withdrew from the Chinese market in 2010 over censorship and cybersecurity issues, did not immediately respond to the announcement.
In addition, China included tungsten, tellurium, bismuth, molybdenum, and indium to its list of export-controlled materials, further extending restrictions initially placed on gallium late last year. Observers caution that China’s dominance in rare and specialty minerals could place American manufacturers at a disadvantage if Beijing opts for tighter export constraints.
China’s Commerce Ministry also placed two US firms on its “unreliable entities” list: PVH Group, owner of Calvin Klein and Tommy Hilfiger, and biotech firm Illumina. This means the listed firms can see their operations in China restricted, with the move appearing to have stemmed from concerns over compliance with Chinese regulations and policy positions, including PVH’s stance on cotton originating from Xinjiang.
Trump is expected to speak with Chinese President Xi Jinping in the coming days.
Information for this briefing was found via BOE Report and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
