On Tuesday, China announced a series of measures targeting U.S. businesses like Google, farm equipment manufacturers, and the owner of Calvin Klein following the implementation of new tariffs on Chinese goods. Beijing swiftly imposed tariffs on American products such as coal, oil, and certain cars in response to the duties imposed by U.S. President Donald Trump, escalating trade tensions between the two largest economies globally.
China's State Administration for Market Regulation revealed it was probing Google for potential violations of the country's anti-monopoly law, without specifying the alleged breaches. Google's services, including its search engine, are inaccessible in China, where its revenue accounts for only 1% of its global sales.
Additionally, China's Commerce Ministry listed PVH Corp and Illumina as unreliable entities" due to "discriminatory measures against Chinese firms that purportedly infringed on Chinese companies' rights.
In response, PVH expressed surprise and dismay at being blacklisted but asserted its commitment to compliance with laws. It pledged to cooperate with authorities for a favorable outcome. On the other hand, Illumina did not respond to requests for comment.
While PVH and Illumina's premarket shares dropped, Google's parent company, Alphabet, saw an increase. China also introduced 10% tariffs on U.S. farm equipment, potentially impacting companies like Caterpillar, Deere & Co, AGCO, and Tesla's Cybertruck, awaiting sales approval in China.
The Ministry of Industry and Information Technology designated the Cybertruck as a "passenger car," hinting at a 10% tariff if classified as an electric truck. Tesla remained silent on the issue.
Set to begin on February 10, the new tariffs are part of the ongoing trade skirmishes under the Biden administration against China, involving semiconductor restrictions. China's actions are interpreted as signaling intentions to protect its interests while leaving room for resolution, as noted by Capital Economics.