China announced on Tuesday, February 4, 2025, that it would impose retaliatory tariffs on multiple U.S. imports in response to President Donald Trump’s tariffs on Chinese products. Additionally, Beijing unveiled an antitrust investigation into Google and introduced new trade measures targeting the United States.
Under the new measures, China will implement a 15% tariff on coal and liquefied natural gas (LNG), along with a 10% tariff on crude oil, agricultural machinery, and large-engine vehicles imported from the U.S. These tariffs are set to take effect next Monday.
China Criticizes U.S. Trade Actions
In a statement, China’s Ministry of Finance condemned the U.S. tariff increases, asserting that they violate World Trade Organization (WTO) regulations.
“The U.S.’s unilateral tariff increase seriously violates the rules of the World Trade Organization,” the ministry stated. “It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the U.S.”
Beijing also announced plans to file a complaint with the WTO over what it described as “malicious” tariffs, according to Agence France-Presse.
China, the world’s largest importer of liquefied natural gas, primarily sources LNG from Australia, Qatar, and Malaysia. While the U.S. is the world’s leading LNG exporter, it does not have significant LNG trade with China.
Google Under Investigation for Antitrust Violations
In a separate but closely timed move, China’s State Administration for Market Regulation launched an antitrust investigation into Google on Tuesday, citing potential violations of competition laws. While the announcement did not explicitly reference the ongoing trade dispute, it was released just minutes after Mr. Trump’s 10% tariffs on Chinese goods took effect.
The impact of the probe on Google’s operations remains uncertain. The company already has a limited presence in China, as its search engine and many of its services are blocked. Google withdrew from the Chinese market in 2010 after refusing to comply with government censorship demands and following cyberattacks targeting the company.
Google did not immediately comment on the investigation.
Additional Trade Measures and Resource Export Controls
Alongside its tariff retaliation and the Google probe, China introduced export controls on several critical minerals used in high-tech manufacturing. These include tungsten, tellurium, bismuth, molybdenum, and indium, all designated by the U.S. Geological Survey as essential to U.S. economic and national security interests.
These restrictions add to prior measures implemented in December, when China imposed export controls on key elements such as gallium, a material vital to semiconductor production.
China’s Commerce Ministry also placed two U.S. companies—PVH Group (parent company of Calvin Klein and Tommy Hilfiger) and Illumina (a biotechnology firm with operations in China)—on its “unreliable entities” list. This designation prohibits the firms from engaging in China-related import or export activities and bars them from making new investments in the country.
China launched an investigation into PVH Group in September 2024 over alleged “improper Xinjiang-related behavior,” following reports that the company had boycotted the use of cotton sourced from the Xinjiang region.
Economic and Political Implications
Analysts warn that China’s retaliatory measures could have significant consequences not only for the U.S. economy but also for global markets.
This latest escalation echoes the 2018 U.S.-China trade war, when Mr. Trump raised tariffs on Chinese goods, prompting immediate countermeasures from Beijing.
However, analysts suggest that China is now better positioned to respond.
“They have a much more developed export control regime. We depend on them for a lot of critical minerals: gallium, germanium, graphite, and a host of others. So … they could put some significant harm on our economy,” said Philip Luck, a former State Department official and director at the Center for Strategic and International Studies, speaking at a forum on Monday.
Stephen Dover, chief market strategist and head of the Franklin Templeton Institute, cautioned that the situation could worsen.
“A risk is that this is the beginning of a tit-for-tat trade war, which could result in lower GDP growth everywhere, higher U.S. inflation, a stronger dollar, and upside pressure on U.S. interest rates,” Dover said.
Wider Trade Tensions with U.S. Neighbors
The U.S.-China trade dispute is unfolding amid broader tensions between the Trump administration and other key trade partners.
On Saturday, Mr. Trump signed orders imposing a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese goods, which took effect at 12:01 a.m. on Tuesday.
However, following discussions with Mexican and Canadian leaders, Mr. Trump postponed the tariffs on North American imports for at least a month, after both countries agreed to step up efforts to combat drug trafficking and illegal migration at the U.S. border.
Mexico and Canada have both warned that if the U.S. proceeds with the tariffs, they will impose retaliatory measures on American exports, raising fears of a broader trade war that could disrupt North American economic activity.