China imposes restrictions on Google and other U.S. firms amid escalating trade tensions

 Beijing also imposed tariffs on U.S. goods, including coal, oil, farm equipment, fashion items, and certain automobiles.

China announced a series of measures on Tuesday targeting U.S. businesses, including Google, farm equipment manufacturers, and PVH Corp, the owner of fashion brand Calvin Klein. The move came just minutes after new U.S. tariffs on Chinese goods took effect, escalating trade tensions between the world’s two largest economies.

In response to the fresh U.S. duties imposed by President Donald Trump, Beijing also levied tariffs on American products such as coal, oil, and certain automobiles.

China’s State Administration for Market Regulation revealed that Google was under investigation for suspected violations of the country’s anti-monopoly law. However, it did not provide specific details regarding the allegations or the scope of the probe. While Google’s search engine and many of its services are blocked in China, the company still collaborates with Chinese advertisers, and revenue from the country accounts for about 1% of its global sales.

Google had previously attempted a small-scale artificial intelligence initiative in China, launching an AI research center in 2017. However, the project was shut down two years later, and the company no longer conducts AI research in the country, according to a company blog post.

Additionally, China’s Commerce Ministry placed PVH Corp and U.S. biotechnology firm Illumina on its “unreliable entity” list, citing alleged discriminatory practices against Chinese enterprises that it claimed harmed their legitimate rights and interests. Companies on this blacklist face potential fines, trade restrictions, and sanctions, including work permit revocations for foreign employees.

While Google declined to comment, PVH expressed surprise and disappointment over the decision, asserting that it adheres to all relevant laws and industry standards. The company stated it would continue engaging with authorities in hopes of a resolution. Illumina did not respond to requests for comment.

Following the announcement, shares of PVH and Illumina fell nearly 4% in premarket U.S. trading, while Google’s parent company, Alphabet, saw a 1% rise.

PVH had already been under scrutiny in China for alleged misconduct related to the Xinjiang region.

Analysts at Capital Economics suggested that China’s actions serve as a warning to the U.S., signaling its willingness to retaliate while still leaving room for de-escalation. They noted that the tariffs could be delayed or withdrawn and that the antitrust investigation into Google might conclude without penalties.

TESLA AND AGRICULTURAL MACHINERY COMPANIES

China announced a 10% tariff on imports of U.S. farm equipment, potentially affecting companies like Caterpillar, Deere & Co, and AGCO. The tariff will also apply to a limited number of trucks and large-engine sedans exported from the U.S. to China.

This could impact Tesla’s Cybertruck, a niche product the company has been promoting in China while awaiting regulatory approval for sales. In December, China’s Ministry of Industry and Information Technology briefly classified the Cybertruck as a "passenger car" in an online posting that was quickly removed.

If the Cybertruck is officially categorized as an electric truck, Tesla would be subject to the 10% tariff on any future imports from its Texas factory. Tesla has not provided a comment on the matter. The new tariffs are set to take effect on February 10, according to China's Ministry of Commerce.

Tuesday’s announcements mark an escalation in trade restrictions between Beijing and Washington, which had previously been focused primarily on the tech sector under former U.S. President Joe Biden. His administration sought to curb China’s access to advanced semiconductors.

In December, China launched an antitrust investigation into Nvidia, a move widely viewed as retaliation for Washington’s latest chip export restrictions. Additionally, late last year, an influential Chinese industry group called for a security review of Intel’s products sold in China.