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China Imposes Tariffs on US Energy and Vehicles Amid Trade Tensions

China has retaliated against the latest US tariff hikes by imposing its own levies on American coal and liquefied natural gas (LNG), escalating tensions in an ongoing trade dispute between the two economic giants.

On Tuesday, China’s Ministry of Finance announced a 15% tariff on US coal and LNG imports, just minutes after US President Donald Trump declared a fresh round of 10% tariffs on Chinese goods. Additionally, Beijing imposed 10% tariffs on US crude oil, large-displacement vehicles, pickup trucks, and agricultural machinery.

Escalating Trade Dispute

President Trump’s decision to raise tariffs extends beyond China, impacting key trade partners like Canada and Mexico. He justified the move as a measure to curb the flow of illegal immigration and fentanyl into the United States.

China, however, slammed the tariff hike as a violation of World Trade Organization (WTO) regulations and a disruption to normal trade relations. In response, Beijing has filed an official complaint with the WTO, calling the US actions “malicious.”

“China has initiated a WTO dispute settlement case against the latest US tariff measures to protect its legitimate trade rights and interests,” the Chinese Ministry of Commerce said in a statement.

The newly announced Chinese tariffs, set to take effect on February 10, were revealed just as Trump announced plans for a phone call with Chinese President Xi Jinping within the next 24 hours.

China Launches Antitrust Probe Against Google

Adding to the growing economic tensions, China’s market regulator has opened an antitrust investigation into Google, accusing the US tech giant of violating China’s Anti-Monopoly Law.

The State Administration for Market Regulation (SAMR) confirmed the investigation but did not provide further details on the allegations.

Google has had a fraught relationship with China for over a decade. It exited the Chinese search market in 2011 due to government censorship concerns and has since seen its services—including Gmail—blocked in the country.

Meanwhile, China also announced that US companies PVH Corp (owner of Tommy Hilfiger and Calvin Klein) and biotech firm Illumina have been added to its “unreliable entities” list. The Chinese commerce ministry stated the move was aimed at protecting national sovereignty, security, and economic interests.

PVH had already been under Chinese scrutiny over alleged involvement in boycotting cotton from Xinjiang, a region where Beijing has faced international criticism over human rights violations.

US Strikes Deals with Canada and Mexico

While tensions with China escalate, the US has managed to ease trade friction with its two biggest neighbors.

Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau struck last-minute agreements with Trump to toughen border security measures in exchange for pausing threatened US tariffs.

Mexico agreed to deploy 10,000 troops to its northern border, while Canada committed to strengthening its anti-fentanyl measures, labeling drug cartels as terrorist organizations and appointing a “Fentanyl Czar”.

However, questions remain over how significant these new measures are. Canadian officials previously reported 8,500 personnel were already assigned to border security, raising doubts over whether the commitment represents a real change.

A Trade War or Something Bigger?

Despite the tit-for-tat tariffs, White House officials insist that the latest measures are not about trade, but about tackling drug trafficking.

“This is not a trade war; this is a drug war,” National Economic Council Director Kevin Hassett told CNBC, responding to criticism over the tariffs. He also accused Canada of misunderstanding US intentions.

Meanwhile, Trump remains steadfast in his belief that tariffs are an effective tool, famously calling them the “most beautiful word in the dictionary.”

While experts warn that these policies will raise costs for American consumers, Trump acknowledged over the weekend that the US economy may feel some short-term pain—a reality that many analysts believe could intensify in the coming months.

What’s Next?

With China’s tariffs set to take effect next week and the US eyeing further economic measures, tensions between the two nations remain high.

Whether upcoming talks between Trump and Xi Jinping will ease the dispute or fuel further escalation remains to be seen.

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