Key Points
- China imposed new tariffs on U.S. coal, oil, and certain automobiles in response to U.S. trade restrictions.
- Chinese regulators launched an antitrust investigation into Google. PVH Corp and Illumina were added to China’s “unreliable entity” list, facing potential sanctions.
- A 10% tariff was imposed on U.S. farm equipment, affecting companies like Caterpillar and Deere & Co.
- Tesla’s Cybertruck could face new import duties as it awaits approval for sale in China.
China announced a series of retaliatory measures against U.S. businesses on Tuesday, minutes after President Donald Trump’s new tariffs on Chinese goods took effect. The Chinese government introduced new tariffs on American coal, oil, and certain automobiles while launching regulatory actions against major U.S. firms, further escalating tensions between the two largest global economies.
Among the most notable actions was the announcement by China’s State Administration for Market Regulation of an antitrust investigation into Google, accusing the tech giant of violating the country’s anti-monopoly laws. Though Google’s services are largely blocked in China and only contribute about 1% of its global revenue, the company maintains business relationships with local advertisers. The details of the investigation remain unclear, and Google declined to comment.
China’s Ministry of Commerce also placed PVH Corp, the parent company of Calvin Klein and Tommy Hilfiger, along with U.S. biotechnology firm Illumina, on its “unreliable entity” list. Chinese authorities accused these companies of engaging in discriminatory actions that harmed the rights of Chinese enterprises. Inclusion on this blacklist could result in significant sanctions, including fines, restrictions on trade, and potential revocation of work permits for foreign employees. PVH and Illumina experienced a nearly 4% drop in stock prices following the announcement.
In a further move, China imposed a 10% tariff on U.S. farm equipment imports, potentially impacting major American manufacturers such as Caterpillar, Deere & Co., and AGCO. This new tariff also applies to a limited number of trucks and high-powered sedans exported from the U.S. to China. Notably, Tesla’s Cybertruck, awaiting regulatory clearance for sale in China, could face these new duties.
The new tariffs will take effect on February 10. Analysts at Capital Economics suggest that China’s actions serve as both a warning and a bargaining tool, leaving room for possible de-escalation before the tariffs take effect. The Chinese government has previously targeted U.S. tech firms, launching an antitrust probe into Nvidia and calling for security reviews of Intel products as part of its broader strategy to counter U.S. restrictions on China’s semiconductor industry.
