The US-China trade conflict has escalated yet again, with China swiftly retaliating after President Donald Trump imposed a fresh 10% tariff on Chinese goods. In response, Beijing has launched an antitrust probe into Google and introduced new tariffs on key US exports, marking a renewed phase of economic tensions between the world’s two largest economies.
China’s Countermeasures: Tech and Trade Under Fire
Within hours of Trump’s tariff announcement, China’s State Administration for Market Regulation (SAMR) confirmed an antitrust investigation into Google, alleging monopolistic practices. At the same time, China’s Finance Ministry rolled out tariffs of 15% on US coal and liquefied natural gas (LNG) and 10% on oil and agricultural equipment, targeting some of America’s most vital export industries.
China’s Ministry of Commerce issued a strongly worded statement, criticizing Washington’s move:
“The US’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization. It is not only unhelpful in solving its own problems but also undermines normal economic and trade cooperation between China and the US.”
Comparing Global Reactions: Exemptions for Mexico and Canada
China’s swift response contrasts sharply with Mexico and Canada, which successfully negotiated temporary exemptions from the US’s 25% tariffs following separate agreements with the Trump administration. This signals China’s unwillingness to back down without countermeasures, reinforcing its hardline approach to trade disputes with Washington.
In addition to tariffs, Beijing broadened its economic retaliation:
- PVH Corp. (parent company of Calvin Klein) and biotech firm Illumina Inc. were added to China’s unreliable entity list, a designation that could severely restrict their business operations in China.
- Tungsten-related materials, a key resource for electronics and defense industries, are now subject to tighter export controls, potentially impacting US supply chains.
Financial Market Reactions: Currencies and Commodities Hit
The financial impact of these escalations was immediate.
- The offshore yuan weakened by 0.3%, reflecting concerns over economic instability.
- Australian and New Zealand dollars, which are closely linked to Chinese trade activity, saw nearly a 1% decline.
- Other Asian currencies, including the Thai baht and Indonesian rupiah, also faced pressure, signaling broader market concerns over the worsening trade environment.
Google Under Scrutiny: Broader Implications for US Tech
Although Google’s core search services have been banned in China since 2010, the company continues to operate in the country through its advertising business. The antitrust investigation, however, suggests China is expanding its crackdown on US tech firms, using regulatory measures as a strategic counterweight to Washington’s trade policies.
The timing of this probe is significant, indicating Beijing’s willingness to use Big Tech as a bargaining chip in the ongoing trade standoff. With past actions against Apple and Micron Technology, China has demonstrated its capacity to target US firms strategically, leveraging regulatory pressure to exert economic influence.
Trump’s Tariff Policy and Future Escalation Risks
The US tariffs, which took effect just after midnight on Tuesday, were justified by Trump’s administration on grounds of national security and China’s alleged failure to curb the flow of illicit drugs into the US.
Significantly, Trump’s executive order contains provisions for additional tariff hikes if China retaliates—a clear warning of further escalation. With Beijing already implementing countermeasures, the possibility of more aggressive trade policies from Washington remains high.
As global markets brace for impact, the US-China economic rivalry appears far from resolution, with trade, technology, and geopolitics deeply entangled in an increasingly volatile confrontation.
