The world’s top two economies have exchanged trade war blows this morning.
Donald Trump imposed an additional 10% tariff on all Chinese imports at 5am.
Within minutes, China retaliated with an announcement of 15% tariffs on US coal and liquified natural gas, and 10% on crude oil, farm equipment and some vehicles.
The new tariffs will start on 10 February, China’s commerce ministry said.
Alongside its tariffs on the US, China has launched an anti-monopoly investigation into Google.
The country’s state market regulator did not offer any further details on the probe or on what it alleged Google had done to breach the law.
“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.
China’s commerce ministry said the country would also impose export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items to “safeguard national security interests”.
Trump warned he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the US.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” he said yesterday.
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.
A White House spokesperson said Trump would not be speaking with Chinese President Xi Jinping until later in the week.
On the anti-monopoly investigation into Google, Google products such as its search engine are blocked in China, but it works with local companies like advertisers.
China also added two US firms to its “unreliable entity list”: PVH Corp, the holding company for brands including Calvin Klein, and biotechnology firm Illumina.
Its commerce ministry said the two companies took what it called “discriminatory measures against Chinese enterprises” and “damaged” the legitimate rights and interests of Chinese companies.
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