China Retaliates Against US Tariffs with Tariffs, Probes, WTO Complaint

China said, on Tuesday, February 4, that it would impose tariffs of 15% on imports of coal and liquefied natural gas from the United States, in retaliation for Washington’s 10% levies on Chinese goods.

Beijing’s finance ministry also unveiled 10% tariffs on imports from the United States of crude oil, agricultural machinery, large-displacement vehicles and pickup trucks. The new measures were in response to the “unilateral tariff hike” by Washington over the weekend, Beijing said.

US President Donald Trump on Saturday announced sweeping measures against major trade partners including Canada and Mexico, with goods from China facing an additional 10% tariff on top of the duties they already endure. Canada, China and Mexico are the United States’s three biggest trading partners. Trump said the measures aimed to punish countries for failing to halt flows of illegal migrants and drugs including fentanyl into the United States.

Beijing’s tariffs, which come into force next Monday, were announced shortly after Trump said he would hold a call with President Xi Jinping in the next 24 hours.

The US move, China said, “seriously violates World Trade Organization rules, does nothing to resolve its own problems, and disrupts normal economic and trade cooperation between China and the United States.”

Beijing added that it had filed a complaint with the World Trade Organization “to defend its legitimate rights and interests” in response to hiked US tariffs on Chinese goods. “China has filed a case against the US tariff measures under the WTO dispute settlement mechanism,” the commerce ministry said in a statement, adding the US actions were of a “malicious nature.”

Beijing also unveiled fresh export controls on rare metals and chemicals including tungsten, tellurium, bismuth, and molybdenum, used in a range of industrial appliances.

Asian equities spiked on Tuesday over news of the paused tariffs, and hopes that similar negotiations could relieve the levies against the world’s number-two economy provided extra optimism. However, traders pared some of those gains as China unveiled its measures.

Alongside its tariffs, China announced a probe into US tech giant Google as well as adding US fashion group PVH Corp. – which owns Tommy Hilfiger and Calvin Klein – and biotech giant Illumina to a list of “unreliable entities.”

Beijing’s State Administration for Market Regulation said the US tech giant was “suspected of violating the Anti-Monopoly Law of the People’s Republic of China.” It has “launched an investigation into Google in accordance with the law” as a result, the administration said in a statement.

The move would “safeguard national sovereignty, security and development interests, in accordance with relevant laws,” China’s commerce ministry said in a statement. “The above two entities violate normal market transaction principles, interrupt normal transactions with Chinese enterprises, and take discriminatory measures against Chinese enterprises,” it added.

China in September said it was investigating PVH for “unreasonably boycotting” cotton from its Xinjiang region, where Beijing is accused of widespread rights violations.