China announced a sweeping set of retaliatory measures on Tuesday targeting major US businesses, including tech giant Google, farm equipment manufacturers, and fashion conglomerate PVH Corp, the owner of brands such as Calvin Klein and Tommy Hilfiger. The move came just minutes after the United States imposed fresh tariffs on Chinese goods, signaling a sharp escalation in trade tensions between the world’s two largest economies.
In a swift response, Beijing also imposed tariffs on American products, including coal, oil, and certain automotive categories, raising fears of a prolonged and intensifying trade war.
The State Administration for Market Regulation (SAMR) announced that it had launched an investigation into Google, suspecting the company of breaching China’s anti-monopoly law. Although the regulator did not provide specifics about the allegations, the announcement is seen as a symbolic warning to American tech companies operating or partnering with Chinese firms.
While Google’s search engine and many other services are blocked in China, the company maintains partnerships with Chinese advertisers and has historically conducted limited AI research in the country. However, its AI project in China was shut down in 2019.
The investigation comes as Washington continues to restrict Chinese access to high-end semiconductor technologies, further straining diplomatic and economic ties between the two nations. Google declined to comment on the investigation.
China’s Commerce Ministry announced that it had added PVH Corp and US biotechnology company Illumina to its “unreliable entity” list. Companies on this blacklist face severe penalties, including fines, restrictions on trade, and potential revocation of work permits for foreign staff.
According to the ministry, the two companies engaged in “discriminatory measures against Chinese enterprises” and harmed the legitimate rights and interests of Chinese businesses.
PVH Corp had already come under regulatory scrutiny in China for alleged misconduct related to the Xinjiang region, a politically sensitive area where China has faced international criticism over alleged human rights abuses. Illumina, a leader in genomic sequencing technologies, has not publicly responded to the allegations.
Neither PVH Corp nor Illumina immediately responded to requests for comment.
China’s response also included the imposition of 10 percent tariffs on US farm equipment, which could directly impact companies such as Caterpillar, Deere & Co, and AGCO. These tariffs also apply to a limited number of trucks and large-engine sedans exported from the US to China.
Elon Musk’s Tesla Cybertruck may be caught in the crossfire. China’s Ministry of Industry and Information Technology briefly designated the Cybertruck as a passenger car in December, a move that would subject it to a 10 percent tariff. However, the designation was quickly removed. Tesla did not immediately respond to questions about the potential tariff implications.
The new tariffs on farm equipment and automotive imports are scheduled to take effect on February 10, 2025.
These developments mark a significant broadening of trade restrictions that had previously focused primarily on the technology sector. Under former US President Joe Biden, the US government had sought to restrict China’s access to advanced semiconductors, citing national security concerns.
China, in turn, launched an anti-monopoly investigation into Nvidia in December and called for a security review of Intel products last year. Analysts see Beijing’s actions as calculated retaliatory measures designed to signal its ability to respond to US trade curbs.
Economic analysts view China’s latest moves as part of a strategy to assert its willingness to defend its interests while leaving room for negotiation. “These moves are warnings that China intends to harm US interests if need be but still give China the option to back down,” noted a report from Capital Economics.
“The tariffs could be postponed or canceled before they come into effect. The probe against Google could conclude without any penalties,” the report added.
The escalation of trade restrictions between Beijing and Washington has rattled global markets. Investors are concerned that the latest round of tit-for-tat measures could further disrupt global supply chains and dampen economic growth.
US farm equipment manufacturers are likely to feel the immediate impact of China’s tariffs, potentially reducing their market share in the world’s second-largest economy. The blacklisting of PVH Corp and Illumina may also have long-term implications for the US fashion and biotechnology industries.
The potential fallout for Tesla is another point of concern, as the electric vehicle maker has been aggressively promoting the Cybertruck in China while awaiting regulatory clearance to begin sales.
The timing of China’s announcements suggests a deliberate response to Washington’s latest trade measures, signaling that Beijing is prepared to defend its economic interests vigorously.
The trade conflict has political implications for both nations, with US President Donald Trump’s administration adopting a tough stance on China as part of its “America First” policy. Meanwhile, Chinese President Xi Jinping has emphasized the need for technological self-reliance and economic stability in the face of external pressures.
As the trade war intensifies, both sides face mounting pressure to find a resolution. However, with neither country showing signs of backing down, the prospect of a prolonged and damaging conflict looms large.
China’s decision to target key sectors of the US economy, from technology and agriculture to fashion and biotechnology, underscores its determination to push back against Washington’s trade measures.
Whether this latest escalation will lead to meaningful negotiations or further entrench the trade conflict remains to be seen. For now, businesses and consumers on both sides of the Pacific must brace for the impact of rising tariffs, regulatory hurdles, and geopolitical uncertainty.
