Additional 10% tariff across all Chinese imports into the U.S. came into effect on Tuesday after Trump repeatedly warned Beijing it was not doing enough to halt the flow of illicit drugs into the United States, Reuters reported.
Within minutes, China s Finance Ministry said it would impose levies of 15% for U.S. coal and LNG and 10% for crude oil, farm equipment and some autos.
China also said it was starting an anti-monopoly investigation in Alphabet Inc s Google, while including both PVH Corp the holding company for brands including Calvin Klein, and U.S. biotechnology company Illumina on its "unreliable entities list".
Separately, China s Commerce Ministry and its Customs Administration said it is imposing export controls some rare earths and metals that are critical for hi-tech gadgets and the clean energy transition.
China s new tariffs on the targeted U.S. exports will start on Feb. 10, the ministry said, giving Washington and Beijing some time to try and reach a deal. Trump plans to speak to Chinese President Xi Jinping later in the week, a White House spokesperson said.
Trump on Monday suspended his threat of 25% tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighbouring countries.
During his first term in 2018, Trump initiated a brutal two-year trade war with China over its massive U.S. trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy.
"The trade war is in the early stages so the likelihood of further tariffs is high," Oxford Economics said in a note as it downgraded its China economic growth forecast.
China has called fentanyl America s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.
The U.S. is a relatively small source of crude oil for China, accounting for 1.7% of its imports last year, worth about $6 billion. Just over 5% of China s LNG imports come from the U.S.
Crude prices extended losses to tumble 2% after China s retaliation, and stocks in Hong Kong pared gains. The dollar strengthened while the Chinese yuan, the euro, Australian and Canadian dollars as well as the Mexican peso all fell, reflecting growing market concerns about the risk of a protracted global trade war.
