Beijing bites back with big tariff hit on US

China slugged the US with 15 per cent tariffs on coal and liquefied natural gas just hours after Canada and Mexico won a 30-day reprieve from Donald Trump’s 25 per cent tariffs.

China slugged the US with 10 per cent tariffs on coal and liquefied natural gas imports in retaliation for Washington’s levies on ­Chinese goods, only hours after Canada and Mexico won a 30-day reprieve from Donald Trump’s 25 per cent tariffs.

Beijing’s tariffs, which range from 10 to 15 per cent and come into force next Monday, will also ­affect US imports of crude oil, agricultural machinery and pick-up trucks.

Beijing also announced an antitrust probe into Google and additional export controls on rare metals, as it reprised a pattern of counterpunching that characterised the trade war between the world’s two biggest economies in Trump’s first term.

“The US’s unilateral imposition of tariffs seriously violates the rules of the World Trade ­Organisation,” China’s finance ministry said when announcing the tariffs.

“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.”

Mr Trump earlier said he would speak to President Xi Jinping, “probably over the next 24 hours”, but there had been no talks before China’s countermeasures were unveiled.

Beijing’s measures were announced after the ASX closed. The Australian dollar fell almost 1 per cent on the news.

The superpower flare up came as Canada’s business sector warned its economy was in a state of limbo despite being given a one-month reprieve from Mr Trump’s 25 per cent tariffs, after Prime Minister Justin Trudeau struck a last-minute deal with the US President.

Mexican President Claudia Sheinbaum also struck a last-minute deal to tighten border measures against the flow of ­migrants and fentanyl into the US.

Asian equities spiked on Tuesday on news of the paused tariffs, and hopes that similar negotiations could relieve the levies against the world’s No.2 economy provided extra optimism. However, traders pared some of those gains as China unveiled its measures.

Mr Trump said that after “very friendly” talks with Ms Sheinbaum he would “immediately pause” the tariffs on Mexico, and that his counterpart had agreed to send 10,000 troops to the US-Mexico frontier.

But earlier in the Oval Office he indicated his frustration with Ottawa by declaring: “Canada is very tough” and “we’re not treated well by Canada, and we have to be treated well”.

“Did you know that the banks, American banks, are not allowed to do business in Canada?” he said. “A lot of things have been very unfair with Canada … We can’t let them take advantage of the US.”

Economy in limbo

However, there was no ­reprieve for China, which had a 10 per cent tariff slapped on its goods from midnight Monday local time.

The tit-for-tat came after Canada’s business sector warned its economy was in a state of limbo ­despite the pause.

The Canadian Chamber of Commerce warned that local businesses had been plunged into limbo because the tariffs still ­remained on the table.

“Tariffs tomorrow instead of tariffs today still leaves businesses, workers and families in the lurch,” chamber chief executive Candace Laing said.

“We will not sleep easier until tariffs are taken off the table permanently. Raising the cost of living for Americans and Canadians with these taxes is the wrong move. Canada and the US make things together, and we should in fact be building on that.

“This is not a game we want to play when livelihoods depend on existing US relationships.”

Lana Payne, the national president of Unifor, Canada’s largest private-sector union, warned: “No one should let their guard down at this 30-day pause on the tariffs.

“The threat of tariffs and therefore the continued threat of economic harm to the workers of Canada must be front and centre.

“We must use the days ahead to continue to bring Canadians together, to plan for a potential trade war, and to use every single available lever to build a strong, resilient, and ­diverse economy.”

Mr Trudeau said Canada had agreed to implement a $1.3bn plan that would reinforce the border with “new choppers, technology and personnel, enhanced co-ordination with our American partners, and increased resources to stop the flow of fentanyl”.

“Nearly 10,000 frontline personnel are and will be working on protecting the border,” he said.

The Prime Minister also committed to appointing a fentanyl tsar, listing cartels as terrorist organisations, and other measures at a cost of $C200m ($223m).

Responding to the threatened US tariffs, Ontario Premier Doug Ford earlier said the province would immediately ban American companies from winning provincial contracts.

Ontario would also rip up its $100m contract with Elon Musk’s Starlink aimed at providing high-speed internet.

“Every year, the Ontario government and its agencies spend $30bn on procurement, alongside our $200bn plan to build Ontario. US-based businesses will now lose out on tens of billions of dollars in new revenues. They only have President Trump to blame,” he posted on X.

Former US secretary of the Treasury, Larry Summers, told CNN that Canada was “not an important source” of illegal drugs or immigrants into the US and ­described the threatened tariffs as a “stop, or I’ll shoot myself in the foot kind”.

He argued the only winner from a trade war would be China and Xi Jinping because America was at risk of “alienating all our traditional allies and creating uncertainty about whether we can be relied on”.

Mr Trump struck a similar deal earlier in the day with Ms Sheinbaum, saying they had a “very friendly conversation”.

“She agreed to immediately supply 10,000 Mexican soldiers on the border separating Mexico and the United States,” he said.

During the next four weeks there would also be negotiations between both governments.

Ms Sheinbaum had reacted furiously to the White House at the weekend when it explained its imposition of 25 per cent tariffs by saying that “Mexican drug trafficking organisations have an intolerable alliance with the government of Mexico”.

She blasted this as “slander against the Mexican government” and strongly rejected the notion of any alliance with criminal organisations.