China Strikes Back: Beijing Brings in Stiff Tariffs on Cars, Trucks, Coal, Oil and Takes Aim at Google

China has retaliated against President Donald Trump’s tariffs by implementing some of its own, renewing a trade war between the world’s top two economies.

The measures, announced by China’s Finance Ministry, levy a 15 per cent duty on certain types of coal and liquefied natural gas and a 10 per cent tariff on crude oil, agricultural machinery, large-displacement cars and pickup trucks.

The country has separately imposed export controls on several elements critical to the production of modern high-tech products. Many of the impacted minerals are essential to US economic or national security and have supply chains vulnerable to disruption.

China’s Commerce Ministry placed two American companies on an unreliable entities list, including the parent company of popular fashion brands Calvin Klein and Tommy Hilfiger, barring the firms from engaging in China-related import or export activities and from making new investments in the country.

Beijing will further probe Google for alleged anti-trust violations, according to a statement from the State Administration for Market Regulation, though the specifics of the probe remain unclear.

The tariffs would go into effect next Monday, but were announced the same day Trump implemented his 10 per cent tariffs on all Chinese imports to the US.

The move came as Trump secured border protection agreements from both Canada and Mexico following a whirlwind day that began with a cratering stock market and the threat of a trade war.

Yet there was no such reprieve for China, and a White House spokesperson said Trump would not be speaking with Chinese President Xi Jinping until later in the week.

The slew of measures announced Tuesday cut across different sectors of the economy, from energy to individual US companies.

Although China and the US have engaged in a tit-for-tat trade war before, analysts warn that this time around China is much better prepared to counter.

‘They have a much more developed export control regime. We depend on them for a lot of critical minerals: gallium, germanium, graphite, a host of others’ said Philip Luck, a former State Department official and director at the Center for Strategic and International Studies. ‘So – they could put some significant harm on our economy.’

American consumers and businesses will likely face higher prices on electronics, shoes and a slew of other products, experts warn.

Jay Foreman, CEO of toy company Basic Fun – which manufactures in China – told The Washington Post that the tariffs will likely cause lower profits for his firm and higher prices for his customers.

China has imposed tariffs on imports of US energy, vehicles and equipment, firing a return salvo in an escalating trade war between the world’s two biggest economies.

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Beijing unveiled levies of 15 per cent on imports of coal and liquefied natural gas (LNG) from the US, while crude oil, agricultural machinery, big-engined vehicles, and pickup trucks face 10 per cent duties.

China is a major market for US energy exports and according to Beijing customs data, imports of oil, coal and LNG totaled more than $7billion last year.

But that is dwarfed by China’s imports from more friendly powers such as Russia, from which it purchased $94billion-worth last year.

In addition to the tariffs, China announced export controls on several elements critical to the production of modern high-tech products.

They include tungsten, tellurium, bismuth, molybdenum and indium, many of which are designated as critical minerals by the US Geological Survey.

The export controls are in addition to ones China placed in December on key elements such as gallium used in manufacturing.

China also announced a wide range of measures targeting US businesses including Google, farm equipment makers and fashion brand Calvin Klein’s owner.

The Commerce Ministry placed PVH Corp, the holding company for brands including Calvin Klein and Tommy Hilfiger, and US biotechnology firm Illumina on its ‘unreliable entity’ list.

It said the two companies took what it called ‘discriminatory measures against Chinese enterprises’ and ‘damaged’ the legitimate rights and interests of Chinese companies.

Companies added to the blacklist can be subject to fines and a broad range of other sanctions, including a freeze on trade and revocation of work permits for foreign staff.

Separately, China’s State Administration of Market Regulation said Google was suspected of violating the country’s anti-monopoly law, and it had initiated an investigation into the company in accordance with the law.

It did not offer any further details on the investigation or on what it alleged Google had done to breach the law.

It is unclear how the probe will affect Google’s operations. Google has a limited presence in China, and its search engine is blocked in the country like most other Western platforms, but it works with local partners such as advertisers in the country.

Google exited the Chinese market in 2010 after refusing to comply with censorship requests from the Chinese government and following a series of cyberattacks on the company.

The response from China appears calculated and measured, said Stephen Dover, chief market strategist and head of the Franklin Templeton Institute. However, the world is braced for further impact.

‘A risk is that this is the beginning of a tit-for-tat trade war, which could result in lower GDP growth everywhere, higher US inflation, a stronger dollar and upside pressure on US interest rates,’ Dover said.

Qiu Huafei, a professor of international relations at Tongji University in Shanghai, said he suspects the retaliatory tariffs are China’s attempt to ‘get some kind of leverage’ over Trump and have ‘bargaining chips in future negotiations’.

He told The Washington Post: ‘China is worried that showing weakness at an early stage will only be followed by more threats from Trump, which China doesn’t want.’

Beijing began investigating PVH Group last September over ‘improper Xinjiang-related behavior’ after the company allegedly boycotted the use of Xinjiang cotton.

Google, PVH and Illumina did not immediately respond to requests for comment outside regular US business hours.

China is the world’s largest importer of liquefied natural gas (LNG), with its top suppliers being Australia, Qatar and Malaysia. The US, which is the biggest exporter of LNG globally, does not significantly export LNG to China.

In 2023, the US exported 173,247 million cubic feet of LNG to China, representing about 2.3 per cent of total natural gas export volumes, according to data released by the Energy Information Administration.

The announcements Tuesday ramped up trade restrictions between Beijing and Washington that had been largely limited to the tech sector under the administration of former President Joe Biden, which sought to restrict China’s access to high-end semiconductors.

China said in December it had launched an investigation into Nvidia over a suspected violation of the country’s anti-monopoly law, a probe widely seen as a retaliatory shot against Washington’s latest curbs on the Chinese chip sector.

Intel’s products sold in China were also called for a security review late last year by an influential Chinese industry group.

During his first term in 2018, Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods, upending global supply chains and damaging the world economy.

To end that trade war, China agreed in 2020 to spend an extra $200billion-a-year on US goods – but that plan was derailed by the COVID-19 pandemic.

Its annual trade deficit then widened to $361billion, according to Chinese customs data released last month.

‘The trade war is in the early stages so the likelihood of further tariffs is high,’ Oxford Economics said in a note as it downgraded its China economic growth forecast.

Trump has now warned he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the United States.

‘China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,’ he said on Monday.

China has called fentanyl America’s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.

But as the tariffs took effect in China on Monday, the offshore yuan dropped 0.3 per cent, to 7.3340 as its trading closed ahead of the Lunar New Year, the Economic Times reports.

Meanwhile, there was relief in Ottawa and Mexico City, as well as global financial markets, after the deals to avert the hefty tariffs on Canada and Mexico.

Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Trump’s demand to crack down on immigration and drug smuggling. That would pause the 25 per cent tariffs due to take effect on Tuesday for 30 days.

Canada also agreed to deploy new technology and personnel along its border with the United States and launch cooperative efforts to fight organized crime, fentanyl smuggling and money laundering.

Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal migration and drugs.

The United States also made a commitment to prevent trafficking of high-powered weapons to Mexico, Sheinbaum said.

‘As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome,’ Trump said on social media.

After speaking by phone with both leaders, Trump said he would try to negotiate economic agreements over the coming month with the two largest US trading partners, whose economies have become tightly intertwined with the United States since the landmark North American Free Trade Agreement was struck in the 1990s.

The Canadian dollar earlier soared after slumping to its lowest in more than two decades. The news also gave US stock index futures a lift after a day of losses on Wall Street, and sent oil prices lower.

Industry groups, fearful of disrupted supply chains, welcomed the pause.

‘That’s very encouraging news,’ said Chris Davison, who heads a trade group of Canadian canola producers. ‘We have a highly integrated industry that benefits both countries.’

But Trump has also suggested the 27-nation European Union would be his next target, though he has not yet said when that may go into effect.

EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs, but also called for reason and negotiation. The US is the EU’s largest trade and investment partner.

Trump further hinted that Britain, which left the EU in 2020, might be spared tariffs.

Trump acknowledged over the weekend that his tariffs could cause some short-term pain for US consumers, but says they are needed to curb immigration and narcotics trafficking and spur domestic industries.

He wrote on his Truth Social platform that there ‘maybe’ some pain, as he defended his executive order.

‘But we will Make America Great Again, and it will all be worth the price that must be paid,’ the president wrote.

The tariffs as originally planned would cover almost half of all US imports and would require the US to more than double its own manufacturing output to cover the gap – an unfeasible task in the near term, ING analysts wrote.

Other analysts said the tariffs could throw Canada and Mexico into recession and trigger ‘stagflation’ – high inflation, stagnant growth and elevated unemployment – at home.

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By Trent Walker

Trent Walker has over ten years experience as an undercover reporter, focusing on politics, corruption, crime, and deep state exposés.

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