China has launched a fresh wave of retaliatory measures against U.S. businesses, including Google, farm equipment makers, and Calvin Klein's parent company, PVH Corp. The decision is in direct response to additional U.S. tariffs on Chinese goods, which have increased trade tensions between the world's two largest economies.
The most recent steps include adding PVH Corp and U.S. biotechnology giant Illumina to China's "unreliable entity" list, citing their alleged discriminatory tactics against Chinese businesses. This designation has severe consequences, including fines, trade restrictions, and the possible revocation of work permits for foreign employees. Chinese officials had already scrutinized PVH for its management of Xinjiang-related concerns.
Meanwhile, China's State Administration for Market Regulation has launched an antitrust inquiry into Google, accusing the company of breaking anti-monopoly regulations. While the facts of the alleged violation are unknown, the investigation signals another hotspot in the continuing U.S.-China tensions.
Notably, Google's fundamental services, like its search engine, are still restricted in China, and the company's revenue from the Chinese market is minimal. However, it continues to work with Chinese marketers and has previously tried to establish an artificial intelligence research center in the country.
China's Finance Ministry also announced 10% tariffs on U.S. farm equipment, which could harm key manufacturers like Caterpillar, Deere & Co., and AGCO. A small number of U.S.-made trucks and high-end sedans would also face new tariffs, potentially affecting Tesla's Cybertruck, currently awaiting regulatory approval in China. If classified as an electric truck, Cybertruck imports from Tesla's Texas factory will incur additional tariffs.
These actions demonstrate China's intention to counter Washington's trade restrictions, which have mostly targeted China's technology industry. In December, China also launched an antitrust investigation into Nvidia, which is considered a direct retaliation to U.S. semiconductor export limits. Analysts believe that, while these retaliatory acts raise tensions, they also provide the possibility for talks since China delayed or canceled the rest restrictions before they take effect on February 10.