China has launched an investigation into Google and imposed new tariffs on various American products in response to President Donald Trump’s decision to levy a 10% tariff on goods imported from Beijing. This move has reignited tensions in the ongoing trade war between the world's two largest economies.

The State Administration for Market Regulation in China announced on Tuesday that it would probe the US tech giant for alleged anti-trust violations. In addition, Beijing imposed new tariffs, including a 15% levy on coal and liquefied natural gas, as well as a 10% tariff on oil and agricultural equipment imported from the United States.

Among the measures announced by China, there are export controls on tungsten-related materials. Furthermore, PVH Corp., the parent company of Calvin Klein, and Illumina Inc. have been added to China’s unreliable entity list, restricting their business operations within the country.

The financial markets reacted swiftly to these developments. The offshore Chinese yuan extended its losses in the afternoon as the US-China trade dispute escalated, dropping 0.3% to 7.3340 against the US dollar. Since the domestic market was closed due to the Lunar New Year holiday, trading was limited. Additionally, China’s trade proxies, including the Australian and New Zealand dollars, also saw declines of at least 0.8%.

Over the weekend, President Trump ordered a broad tariff on Chinese exports, set to take effect at midnight on Tuesday in the US. He justified the decision by accusing Beijing of failing to curb the flow of illegal drugs into the country. The order also included retaliation clauses, allowing for additional tariff increases if China responded with countermeasures.

Disclaimer:This image is taken from File Photo.