China Hits Back at US with 34% Tariffs as Trade War Escalates
The ongoing trade tensions between the United States and China have escalated sharply, with Beijing imposing a 34% tariff on all American imports in retaliation to US President Donald Trump’s latest wave of sweeping trade restrictions. The retaliatory measure, announced by the Chinese government on Friday, is set to take effect from April 10.
Trump had recently imposed a 10% import duty on all nations, with significantly higher tariffs on imports from key trading partners, including China and the European Union. His latest move, dubbed the ‘Liberation Day’ initiative, sent shockwaves through global financial markets. The S&P 500 witnessed its largest single-day drop since 2020, falling by 4.8%, while the Dow Jones Industrial Average plunged 1,679 points.
The US administration had previously imposed a 20% tariff on Chinese goods, and the latest 34% levy brings the cumulative additional tariffs on imports from China to 54%—a move that Beijing has strongly condemned.
Following the US announcement, China’s Commerce Ministry released a statement opposing the new tariffs and vowing to implement countermeasures to safeguard its economic interests.
“China firmly opposes the US-imposed tariffs, which are in violation of international trade rules. We will take all necessary actions to protect our rights and interests,” the ministry stated.
Additionally, Beijing announced new export restrictions on seven key rare earth elements, including gadolinium, widely used in MRIs, and yttrium, essential in consumer electronics. China had previously responded to US tariffs with levies of up to 15% on American agricultural exports, including soybeans, pork, and chicken.
The US and China are each other’s largest trading partners, with Chinese exports to the US exceeding $500 billion in 2024, accounting for 16.4% of its total exports. However, China’s economy has been facing challenges, including a prolonged real estate debt crisis and weak domestic consumption.
Economists warn that a full-scale trade war could dampen China’s hopes for strong export-driven growth this year. “The US tariffs on Chinese imports announced so far could completely negate the benefits of China’s fiscal stimulus measures,” said Frederic Neumann, Chief Asia Economist at HSBC.
China’s top exports to the US—including electronics, electrical machinery, textiles, and clothing—are expected to be the hardest hit. Additionally, existing US tariffs on steel, aluminum, and car imports will further strain economic ties between the two nations.
While the Trump administration has justified the tariffs as a way to reduce the trade deficit and protect domestic industries, some experts argue that the move may backfire on American manufacturers.
“US imports from China are dominated by capital goods and industrial materials rather than consumer products,” said Gene Ma, Head of China Research at the Institute of International Finance. “These tariffs will end up hurting American manufacturers as well as consumers.”
With tensions between the world’s two largest economies escalating, analysts predict a prolonged period of uncertainty in global trade. While China has called for diplomatic dialogue to resolve the dispute, the US has so far shown no signs of backing down from its aggressive tariff strategy.
The coming weeks will be crucial in determining whether the two economic giants can reach a compromise or if the trade war will further intensify, impacting global markets and economic growth.
