China Strikes Back: 15% Tariff on US Coal, LNG, and 10% on Crude Oil

China, on Tuesday, retaliated with a 15% tariff on coal and liquefied natural gas (LNG) imports from the United States after US President Donald Trump threatened to impose tariffs. Beijing's commerce ministry also imposed a 10% tariff on US crude oil, agricultural machinery, and large-displacement vehicles in retaliation for Washington slapping 10% levies on Chinese goods.

China Condemns US Tariffs as WTO Violation

Beijing's commerce ministry criticized the US tariff actions, saying they "seriously violate World Trade Organization rules." The ministry further asserted that Washington's strategy would not only fail to resolve domestic economic issues but would also harm US-China trade relations.

Reports from AP suggest that China's new tariffs will take effect next Monday.

Trump-Xi Meeting on the Horizon

As the trade jitters between the two countries escalate, US President Donald Trump is likely to bring up the topic when he speaks with Chinese President Xi Jinping over the next several days.

China to Launch Antitrust Probe Against Google

In a related development, the Chinese State Administration for Market Regulation announced an investigation into Google on suspicions of antitrust violations. The announcement, which came just minutes before Trump's 10% tariffs were expected to take effect, further raises the stakes in the economic tensions between the two superpowers.

US Trade Tensions Extend to Canada and Mexico

While China retaliates, Trump has been holding last-minute negotiations with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau to avoid a trade war with America's two largest trading partners. Both the leaders agreed to reinforce border controls to reduce illegal migration and fentanyl trafficking in return for a 30-day stay on US tariffs.

Stock Markets React to Trade War Developments

Investor optimism was short-lived, however, surging briefly on Tuesday after the temporary tariff reprieve for Mexico and Canada, only for markets to later dial back gains when China followed through with its retaliatory actions. Global stock markets had slumped on Monday as investors increasingly worried about the escalating trade war.

Trump Defends Tariff Strategy Amid Criticism

Despite criticism, Trump has said the moves by his administration are not about trade but part of a broad operation to stop drug trafficking. "This is not a trade war; this is a drug war," National Economic Council Director Kevin Hassett said in an interview with CNBC. But according to data from the US government, the majority of fentanyl trafficking is done via maritime routes, not across the Canadian border.

Canadian Backlash and Economic Fallout

Trump's tariff threats sparked a national anti-US sentiment across Canada. Canadian consumers began to boycott American products, while the Ontario government blocked US companies from bidding on multi-billion-dollar contracts. In an even more drastic measure, Ontario nixed a deal with Tesla CEO Elon Musk's Starlink project.

With tensions spiraling on several fronts, the never-ending US-China trade war, coupled with disputes in North American trade, goes on defining global economic dynamics. Now, all eyes are turned to the coming Trump-Xi meeting that may decide the fate of the next phase of international trade relations.