China retaliates with tariffs against U.S. 

Select American imports will be hit with tariffs after President Donald Trump put tariffs on Chinese goods.

China has announced retaliatory measures against the U.S. by imposing additional tariffs on select American imports, following the initiation of U.S. tariffs on Chinese goods, raising concerns of a broader trade war between the two largest economies in the world.

The big picture: The Chinese Finance Ministry disclosed that starting February 10, there will be additional tariffs of 15% on coal and liquefied natural gas imports from the U.S., along with a 10% increase in duties on American crude oil, agricultural machinery, specific cars and other products.

  • In response to the U.S. tariffs, China criticized the actions as a violation of the rules of the World Trade Organization, disrupting normal economic and trade activities between the countries.
  • Additionally, Chinese Commerce Ministry and customs officials have announced the implementation of export controls on various critical minerals and technologies, including tungsten, tellurium, ruthenium, molybdenum, and others.

Go deeper: In a separate development, China’s State Administration of Market Regulation has initiated an investigation into Alphabet’s Google over suspected violations of China’s anti-monopoly law, although Google has limited operations in China since 2010.

Driving the news: Trump recently agreed to a 30-day pause on the planned 25% tariffs on imports from Canada and Mexico to address illicit drug trafficking issues, while there was no such deal made between China and the U.S.

  • The escalating tariff actions between the U.S. and China could have significant implications on China’s real GDP growth, potentially reducing it by 50 basis points and leading to calls for domestic stimulus measures to offset the negative impacts from the trade tensions.
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