‘Very volatile’: Beijing retaliates with tariffs on US imports, Google probe

Singapore: China has launched an investigation into Google and will slap additional tariffs of 10 to 15 per cent on a range of US imports including coal and natural gas within days as it retaliated in an escalating trade war with the Trump administration.

Beijing’s rapid response was announced within minutes of a new 10 per cent US tariff on all Chinese imports kicking in on Tuesday in a move US President Donald Trump said was to punish China for its role in the fentanyl crisis.

US President Donald Trump indicated he would seek talks with Chinese leader Xi Jinping before China returned fire with its own tariffs on US goods on Tuesday. Credit: AP

China’s retaliatory tariffs will begin on February 10, signalling the potential for a deal to be discussed between Trump and Chinese President Xi Jinping in coming days.

Speaking in Washington before China’s response, Trump said he would seek talks with Xi “probably over the next 24 hours”.

“If we can’t make a deal with China, then the tariffs will be very, very substantial,” Trump said.

Trump confirmed at the weekend he was proceeding with tariffs of 10 per cent on Chinese goods and 25 per cent on Canadian and Mexican products. But in a last-minute reprieve, he suspended the threats against Canada and Mexico in exchange for concessions on greater law enforcement controls on the fentanyl trade.

As it denounced Trump’s tariff threats, the Chinese government called for dialogue between the two sides but has yet to respond to Trump’s suggested talks.

In a statement on Tuesday, China’s finance ministry said it would levy duties of 15 per cent on coal and LNG, and 10 per cent on crude oil, farm equipment and some vehicles from the US.

Google, whose search engine and other services are blocked in China, would be investigated for allegedly violating the country’s anti-monopoly laws, the State Administration for Market Regulation said.

Chinese authorities also announced further export controls on certain critical minerals used in high-tech industries, citing the need to safeguard “national security and interests”. In addition, two American companies – PVH Corp, which owns Calvin Klein, and biotechnology company Illumina – were put on a trade blacklist.

“The situation is very volatile,” said Dr Alfred Wu, a Chinese politics expert at the National University of Singapore.

“It really depends on the talks between Donald Trump and Xi Jinping – these two people are very hard to predict.”

Dr Benjamin Ho, an assistant professor at Nanyang Technological University’s China program, said it was not surprising that China had not brokered a reprieve with Trump before the tariffs kicked in.

“Unlike Mexico and Canada, whose leaders demonstrated their acquiescence to Trump, China would not do so, believing that America is in the wrong and that it would look weak for Xi if he talked to Trump about it,” Ho said.

“Talks may be likely but only as an equal.”

China repeated its argument that the US tariffs “seriously violates” the rules of the World Trade Organisation, where it has vowed to formally lodge a legal suit.

“It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade co-operation between China and the US,” China’s Finance Ministry said.

The tit-for-tat tariffs revive a trade war that kicked off during Trump’s first administration when he began setting tariffs on Chinese goods, many of which were retained and expanded on by the Biden administration.

A so-called “phase one” deal was brokered between Trump and Xi in 2020, which involved China agreeing to buy an additional $US200 billion of US products, in exchange for a rollback of some tariffs. But China’s commitments were widely regarded as unachievable from the outset and were hindered by the pandemic, and it failed to meet them.

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