U.S. stock futures declined on Tuesday after President Donald Trump’s 10% trade tariffs on China came into effect, while Beijing retaliated with a series of countermeasures.

Dow Jones futures fell 90 points, or 0.2%, while S&P 500 futures fell 8 points, or 0.1%, and Nasdaq 100 futures fell 8 points, or 0.1%.

The major Wall Street indexes ended Monday with a downward trend, although they recovered from session lows after Trump postponed the implementation of a proposed 25% tariff on imports from Canada and Mexico for 30 days.

Beijing Retaliates Against Trump’s Tariffs

However, China did not extend such leniency—its 10% tariffs on U.S. products came into effect on Tuesday.

In response, Beijing imposed a 15% tariff on U.S. coal and liquefied natural gas, along with an additional 10% tariff on crude oil, agricultural equipment, and automobiles, effective February 10.

Additionally, China’s Ministry of Commerce announced export controls on rare earths and exotic materials, where China is a dominant global producer. The materials impacted include tungsten, ruthenium, molybdenum, and tellurium.

Moreover, China added PVH Corp (PVH)—the owner of Calvin Klein—and biotechnology firm Illumina (ILMN) to its “untrustworthy entities” list and initiated an antitrust investigation into Alphabet (GOOG), the parent company of Google.

The retaliatory measures have escalated tensions between the world’s two largest economies, increasing investor concerns about a potential trade war. As China remains the U.S.’s third-largest trading partner—behind Mexico and Canada—further escalation could destabilize global trade even more.

Alphabet Set to Report Earnings

This week, several major companies will publish their earnings, including Merck (MRK) and PepsiCo (PEP).

However, all eyes are on Alphabet (GOOG), Google’s parent company, which is scheduled to release its latest quarterly results after the closing bell.

Analysts are particularly focused on Alphabet’s spending plans for artificial intelligence (AI), especially following last week’s emergence of DeepSeek, the Chinese AI start-up that has intensified competition in the sector.

Crude Oil Drops Amid Global Production Fears

Oil prices plunged on Tuesday as investors factored in the economic impact of the U.S.-China tariff retaliation and its potential disruption to global trade flows.

Despite these developments, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) maintained their existing production plans, resisting Trump’s demands for lower crude prices.

OPEC+ has reaffirmed its commitment to gradually phase out production cuts starting April 1, in response to low inventories and rising global demand.

The oil cartel has been cutting production by 5.85 million barrels per day, which represents approximately 5.7% of global supply, in line with agreements made since 2022.

Investors will continue to monitor how tariff-related uncertainty and geopolitical developments impact oil markets and energy prices in the coming weeks.