WASHINGTON/BEIJING —  China on Tuesday slapped tariffs on US imports in a rapid response to new US duties on Chinese goods, renewing a trade war between the world’s top two economies as President Donald Trump sought to punish China for not halting the flow of illicit drugs.

Mr. Trump’s additional 10% tariff across all Chinese imports into the US came into effect at 12:01 a.m. ET on Tuesday (0501 GMT).

Within minutes, China’s Finance Ministry said it would impose levies of 15% for US coal and LNG and 10% for crude oil, farm equipment and some autos. The new tariffs on US exports will start on Feb. 10, the ministry said.

China also said it was starting an anti-monopoly investigation in Alphabet, Inc.’s Google, while including both PVH Corp., the holding company for brands including Calvin Klein, and US biotechnology company Illumina on its “unreliable entities list.”

Separately, China’s Commerce Ministry and its Customs Administration said the country is imposing export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items to “safeguard national security interests.”

Mr. Trump on Monday suspended his threat of 25% tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighboring countries.

But there was no such reprieve for China, and a White House spokesperson said Mr. Trump would not be speaking with Chinese President Xi Jinping until later in the week.

During his first term in 2018, Mr. Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy.

To end that trade war, China agreed in 2020 to spend an extra $200 billion a year on US goods but the plan was derailed by the COVID pandemic and its annual trade deficit had widened to $361 billion, according to Chinese customs data released last month.

“The trade war is in the early stages so the likelihood of further tariffs is high,” Oxford Economics said in a note as it downgraded its China economic growth forecast.

Mr. Trump warned he might increase tariffs on China further unless Beijing stemmed the flow of fentanyl, a deadly opioid, into the United States.

“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” he said on Monday.

China has called fentanyl America’s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.

NEIGHBORLY DEALS
There was relief in Ottawa and Mexico City, as well as global financial markets, after the deals to avert the hefty tariffs on Canada and Mexico.

Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Mr. Trump’s demand to crack down on immigration and drug smuggling. That would pause 25% tariffs due to take effect on Tuesday for 30 days.

Canada agreed to deploy new technology and personnel along its border with the United States and launch cooperative efforts to fight organized crime, fentanyl smuggling and money laundering.

Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal migration and drugs.

The United States also made a commitment to prevent trafficking of high-powered weapons to Mexico, Ms. Sheinbaum said.

“As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome,” Mr. Trump said on social media.

After speaking by phone with both leaders, Mr. Trump said he would try to negotiate economic agreements over the coming month with the two largest US trading partners, whose economies have become tightly intertwined with the United States since a landmark free-trade deal was struck in the 1990s.

The Canadian dollar earlier soared after slumping to its lowest in more than two decades. The news also gave US stock index futures a lift after a day of losses on Wall Street, and sent oil prices lower.

Industry groups, fearful of disrupted supply chains, welcomed the pause.

“That’s very encouraging news,” said Chris Davison, who heads a trade group of Canadian canola producers. “We have a highly integrated industry that benefits both countries.”

Mr. Trump suggested on Sunday the 27-nation European Union (EU) would be his next target, but did not say when.

EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs, but also called for reason and negotiation. The US is the EU’s largest trade and investment partner.

Mr. Trump hinted that Britain, which left the EU in 2020, might be spared tariffs.

Mr. Trump acknowledged over the weekend that his tariffs could cause some short-term pain for US consumers, but says they are needed to curb immigration and narcotics trafficking and spur domestic industries.

The tariffs as originally planned would cover almost half of all US imports and would require the United States to more than double its own manufacturing output to cover the gap — an unfeasible task in the near term, ING analysts wrote.

Other analysts said the tariffs could throw Canada and Mexico into recession and trigger “stagflation” — high inflation, stagnant growth and elevated unemployment — at home. — Reuters

WASHINGTON — The Trump administration said it would lock US Agency for International Development (USAID) workers out of their headquarters in downtown Washington DC for a second day on Tuesday as it moved to shutter the agency, prompting two Democratic senators to vow to block confirmations of State Department nominees in protest.

Monday’s lockout added to the chaos that has consumed the agency, which distributes billions of dollars of humanitarian aid around the world, since Mr. Trump ordered a freeze on most US foreign aid hours after taking office on Jan. 20.

USAID has been targeted for closure by billionaire Elon Musk, who has been tasked by the president with downsizing the federal government. A senior White House official, speaking on condition of anonymity, said Mr. Trump was considering merging USAID into the State Department and had “entrusted Elon to oversee the efficiency of this agency.”

A group of Democratic lawmakers, cheered by dozens of furloughed agency employees and contractors, held a protest in front of the USAID headquarters, which was shut to the employees on Monday, according to an internal e-mail seen by Reuters.

Another internal e-mail seen by Reuters went out late on Monday, telling employees at the agency’s headquarters and a second site in Washington to work remotely again on Tuesday, adding to concerns voiced by staff members and lawmakers.

“We don’t have a fourth branch of government called Elon Musk,” said US Representative Jamie Raskin, speaking outside the building.

Senators Brian Schatz and Chris Van Hollen said they would block confirmation of Mr. Trump’s nominees for State Department positions under rules that allow them to hold up nominations even if the Republican majority of the chamber want them to move forward.

“We have control over the calendar for nominees,” said Mr. Van Hollen. “We will do everything we can to block State Department nominees from going forward until this illegal action is reversed.”

‘AGAINST THE LAW’
Hundreds of USAID programs covering billions of dollars worth of lifesaving aid across the globe came to a grinding halt after Mr. Trump on Jan. 20 ordered a freeze of most US foreign aid, saying he wanted to ensure it is aligned with his “America First” policy.

If USAID were put under the State Department, it would likely have dramatic consequences for the distribution of aid from the United States, the world’s largest single donor.

Mr. Musk has been increasingly critical of USAID, calling it a left-wing agency unaccountable to the White House. Mr. Musk critics say his accusations are often lodged without evidence and may be ideologically driven.

The rush of events has underlined Mr. Musk’s powerful role in setting Mr. Trump’s agenda. Last week, Mr. Musk’s team at the Department of Government Efficiency gained access to the most sensitive payment systems at Treasury and, as Reuters reported, locked some employees out of their agency’s computers.

At USAID, two senior security staff were put on leave after refusing to provide classified documents to DOGE employees on site over the weekend.

“What’s happening to USAID is against the law,” Mr. Schatz told Reuters outside the agency headquarters. “It’s flatly illegal, and it is dangerous to Americans at home and abroad.”

Some USAID staff waved signs as the lawmakers spoke, including one that read: “USAID saves lives.”

Democrats have argued that eliminating USAID’s independence requires an act of Congress. Mr. Trump told reporters on Monday that he did not believe that was necessary.

“I love the concept (of USAID), but they turned out to be radical left lunatics,” Mr. Trump said.

RUBIO NOW ACTING USAID HEAD
US Secretary of State Marco Rubio told reporters in San Salvador that he was now the acting head of USAID, calling the agency “completely unresponsive” and accusing the staff there of being “unwilling to answer simple questions” about programs.

“If you go to mission after mission and embassy after embassy around the world, you will often find that in many cases, USAID is involved in programs that run counter to what we’re trying to do in our national strategy with that country or with that region. That cannot continue,” Mr. Rubio said.

He informed Congress in a letter of the looming reorganization of the agency, saying some parts of USAID might be absorbed by the State Department and the remainder may be abolished.

Senator Jeanne Shaheen, a Democrat, said she found Rubio’s notification “wholly insufficient on the law and devoid of any rationale for the drastic, abrupt action the administration has taken, with no prior notice to Congress.”

In fiscal year 2023, the United States disbursed, partly via USAID, $72 billion of aid worldwide on everything from women’s health in conflict zones to access to clean water, HIV/AIDS treatments, energy security and anti-corruption work. It provided 42% of all humanitarian aid tracked by the United Nations in 2024.

And yet it is less than 1% of its total budget.

The State Department issued worldwide stop-work directives after Mr. Trump’s freeze order, with the exception of emergency food assistance. Experts warned that the move risks killing people.

Since then, dozens of USAID career staff have been put on leave. Three sources familiar with the matter told Reuters that USAID personal services contractors, who carry out the bulk of the work in the agency’s humanitarian bureau, have also been locked out of their government accounts.

“Without PSCs, there is no longer functionally a Bureau for Humanitarian Assistance in USAID. The waivers from Secretary of State Rubio for emergency food and other urgent assistance are a smokescreen and farce if there is no one to make the awards happen,” a USAID official said. — Reuters

SEOUL — South Korea aims to rebuild its aviation safety system from scratch, the Transport ministry said on Tuesday, launching a new committee to improve air travel in the country that suffered two major aviation incidents a month apart.

“In order to restore trust in our country’s aviation safety system, the government will make a determined effort to rebuild the aviation safety system from the ground up,” Deputy Minister of Land, Infrastructure and Transport Baek Won-kuk will tell the committee, the ministry statement said.

The government must address aviation safety as a top priority, he added.

In the deadliest air disaster ever on South Korean soil, a plane belonging to budget airline Jeju Air crashed at the country’s Muan airport on Dec. 29, killing all but two of the 181 passengers and crew members on board.

Duck remains were found in both engines of the plane, a preliminary investigation report said, indicating bird strikes occurred before the crash. Air accidents are nearly always caused by a combination of factors, according to experts.

Last week, an Air Busan plane was engulfed in flames at Busan’s international airport as the low-cost carrier’s jet prepared to depart, with all on board evacuated safely.

The fire was first detected by a flight attendant in an overhead luggage bin in the rear of the plane, Air Busan has said.

Investigations into the causes of both incidents are ongoing.

The 10-week committee will include private sector experts and will look at issues including maintenance and aircraft utilization rates at budget airlines, and airport construction and operation.

In response to the Jeju Air crash, which saw the plane belly land but then plough into a concrete embankment supporting navigation equipment past the end of Muan’s runway, authorities already said they would amend similar structures at seven airports around the country. — Reuters