China has unveiled a series of countermeasures targeting prominent US businesses, including Google and the owner of fashion brand Calvin Klein, escalating the ongoing trade tensions between the two nations. The announcement came on Tuesday, February 4, following the implementation of new US tariffs on Chinese goods. This latest move by China involves placing several US companies on its "unreliable entity" list and launching investigations into potential anti-monopoly law violations.
China's Commerce Ministry took decisive action by adding PVH Corp, the parent company of Calvin Klein and Tommy Hilfiger, as well as US biotechnology firm Illumina, to its "unreliable entity" list. This measure reflects Beijing's growing frustration with Washington's recent tariff impositions on Chinese coal, oil, and some autos. In response, China plans to implement new tariffs on US products beginning February 10, as confirmed by the Ministry of Industry and Information Technology.
A significant development in this saga is the investigation into Google, initiated by China's State Administration for Market Regulation. The tech giant is accused of violating China's anti-monopoly law through discriminatory practices against Chinese enterprises. The administration claims these actions have harmed the legitimate interests of Chinese companies. Google's presence in China has been minimal, with its search engine blocked and revenue from the region accounting for just about 1% of its global sales. Although Google attempted to establish a small artificial intelligence center in China in 2017, the project was shelved two years later.
In another retaliatory gesture, China has launched an investigation into Nvidia over alleged breaches of anti-monopoly regulations. This action is widely perceived as a response to Washington's recent restrictions on China's chip sector, highlighting the escalating tech-related tensions between the two countries.
Additionally, China's Ministry of Industry and Information Technology has classified Tesla's Cybertruck as a "passenger car," potentially subjecting it to a 10% import tariff from its Texas factory. This classification comes amid China's broader imposition of 10% tariffs on US farm equipment, impacting major manufacturers such as Caterpillar, Deere & Co, and AGCO. These tariffs are in addition to those on a select few trucks and large-engine sedans imported from the US.
PVH Corp, which had already been under scrutiny for "improper" conduct related to the Xinjiang region, now faces increased pressure due to its inclusion on China's "unreliable entity" list. This development raises concerns about the potential impact on PVH's operations in one of the world's largest consumer markets.
The latest measures by China represent a clear retaliation against the US tariffs that took effect earlier. As trade tensions continue to mount between the world's two largest economies, businesses across various sectors may face significant disruptions and uncertainties.
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