China hit back at the “opening salvo” of President Donald Trump’s trade war Tuesday, imposing an array of tariffs on U.S. goods and launching an antitrust probe into Google in response to new tariffs Trump ordered on its exports.
The additional 10 percent tariff on all Chinese imports into the U.S. came into effect after midnight on Tuesday, with Trump warning Beijing it needed to do more to stop the flow of illicit drugs including fentanyl to 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.
Minutes after the U.S. tariffs kicked in, the Chinese Ministry of Finance announced it will impose additional 15 percent tariffs on U.S. coal and liquified natural gas and additional 10 percent tariffs on crude oil and farming equipment.
China’s tariff measures will take effect on February 10.
The country’s antitrust regulator also announced on Tuesday that it was investigating Google over alleged anti-monopoly violations.
Google’s search engine is blocked in China, but the company makes money from Chinese businesses that advertise on its platforms—and on other services offered by its parent company Alphabet—in foreign markets.
Its Android operating system is also used in many Chinese smartphones.
China’s commerce ministry also announced it would “safeguard national security interests” by curbing exports on strategic minerals tungsten, tellurium, ruthenium, molybdenum and ruthenium.
In addition the ministry added two American companies—biotech group Illumina and PVH Group, the maker of Calvin Klein and Tommy Hilfiger clothes—to a national security blacklist for “discriminatory measures against Chinese enterprises.”
China has previously accused PVH of boycotting cotton from Xinjiang, where the country has been accused of detaining over one million predominantly Muslim Ughyur people.
Trump and Chinese President Xi Jinping are expected to hold talks in the coming days, the White House said, leaving room for hope that the two leaders will resolve the dispute before launching a full-scale trade war between the world’s two biggest economic powers.
China’s limited retaliation—as opposed to the Trump administration’s blanket levy on imports—was a “more symbolic move for now,” wrote Oxford Economics analysts, in an note.
They added that, without a resolution, things could soon deteriorate: “The trade war is in the early stages so the likelihood of further tariffs is high.”
Trump alarmed America’s closest allies and investors around the world with a sudden announcement over the weekend that he would tax goods from Canada, Mexico and China.
But the tariffs against Canada and Mexico—levied at 25 percent—were pushed back for a month after last-second negotiations Monday between Trump and Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
Canada and Mexico both agreed to implement several border measures to address Trump’s concerns about drug trafficking and illegal migration, while continuing negotiations for a permanent resolution.
Sheinbaum ordered 10,000 Mexican troops to her country’s border with the U.S. to combat illegal crossings and trafficking.
Trudeau said his country is in the process of implementing a $900 million (CA$1.3 billion) border plan and agreed to list cartels as terrorist groups and appoint a fentanyl czar.
