China Hits Back at US Tariffs with Countermeasures and Google Investigation

The ongoing trade war between the world’s two largest economies, the United States and China, has escalated once again. Moments after President Donald Trump announced a 10% tariff on Chinese goods, Beijing responded with countermeasures, including new tariffs on American exports and an investigation into US tech giant Google.

China’s Counterattack

China wasted no time in retaliating. The State Administration for Market Regulation announced a probe into Google for alleged antitrust violations. Meanwhile, the Chinese government imposed tariffs on key US exports:

• 15% tariff on US coal and liquefied natural gas (LNG)

• 10% tariff on US oil and agricultural equipment

• New export controls on tungsten-related materials

China’s Finance Ministry criticized the US move, calling it a violation of World Trade Organization (WTO) rules. “The US’s unilateral imposition of tariffs seriously violates WTO regulations and does not help solve its problems,” the ministry stated.

A Carefully Calculated Move by China

Unlike previous harsh trade measures, President Xi Jinping’s response appeared to be strategic. By imposing targeted tariffs and launching an antitrust probe into Google, China sent a strong message without significantly harming its own economy.

One of the most notable moves was China’s restriction on tungsten-related exports. Tungsten is a critical material in high-tech manufacturing and military applications. By limiting exports, China could disrupt supply chains, creating additional pressure on US industries.

Market Reactions

Financial markets reacted swiftly to the news. The US dollar rebounded, while China’s offshore yuan fell 0.3%. Currencies of countries with strong trade links to China, such as Australia and New Zealand, dropped by nearly 1%. Asian currencies like the Thai baht and the Indonesian rupiah also saw minor fluctuations.

Dylan Loh, assistant professor of politics at Nanyang Technological University, described China’s response as “measured and appropriate.” He noted that Beijing’s move was calculated to avoid severe retaliation while signaling its ability to strike back.

No Immediate Trade Deal in Sight

Just before the tariffs took effect, Trump suggested he would talk to Xi Jinping in hopes of reaching a deal. However, China’s swift retaliation dashed those hopes. The situation contrasts with the US’s last-minute exemption of Canada and Mexico from its 25% tariff after successful leader-level negotiations.

China imports only a small amount of coal from the US, and American LNG accounted for just 6% of China’s total imports last year. Meanwhile, Google’s consumer services have been banned in China since 2010, though the company maintains some operations related to advertising in the country.

The Road Ahead

With tensions rising, the US-China trade war remains unpredictable. While both nations may still seek negotiations, their recent moves suggest a prolonged economic standoff. Investors and businesses will closely monitor future developments, especially regarding China’s probe into Google and further potential countermeasures.

The question now is: Will these tariffs push the two superpowers toward a new trade deal, or will the conflict intensify further? Only time will tell.

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