Trade Tensions Intensify as China Retaliates with Massive Tariffs Against the US

Hong Kong (CNN) —

China announced on Friday its decision to impose reciprocal 34% tariffs on all imports from the United States starting April 10. This move follows up on Beijing’s vow to retaliate after US President Donald Trump heightened global trade tensions by escalating tariffs.

On Wednesday, President Trump revealed an additional 34% tariff on all goods imported from China into the US. This action is anticipated to significantly alter relationships and further intensify the trade conflict between the world’s two largest economies.

“The actions taken by the US contradict international trade norms, severely damaging China’s legitimate rights and interests, representing a clear instance of unilateral bullying,” stated China’s State Council Tariff Commission, as it unveiled its countermeasures.

Since taking office in January, Trump had already imposed two sets of 10% additional tariffs on Chinese imports. These actions were justified by the White House as necessary to halt the illegal flow of fentanyl from China to the US. As a result, Chinese goods entering the US now face a total of 54% tariffs.

China’s latest round of retaliatory tariffs is more extensive than previous responses. Earlier, Beijing had responded promptly but more reservedly by imposing retaliatory tariffs on select US imports like agricultural products and fuel, alongside measures against American companies and an increase in export controls.

The 54% tariffs exceed analyst expectations and may dramatically transform both economic relations and approximately $500 billion in trade between these interlinked economies after decades of reliance on each other.

As part of its retaliatory moves announced on Friday, coinciding with a major public holiday celebration by millions in China, the country added 11 American companies, including drone manufacturers, to its “unreliable entity list.” Beijing implemented export controls on 16 American companies, restricting the export of Chinese technology with dual uses.

Furthermore, the Commerce Ministry initiated anti-dumping investigations into imported medical CT X-ray tubes from the United States and India. Additionally, Beijing announced export controls on seven rare-earth minerals, including samarium, gadolinium, and terbium, to the US.

Businesses relying on supply chains rooted in China face complex challenges. They must now navigate not only the unexpectedly high US tariffs on Chinese imports but also those placed on other Asian nations, due to Trump’s extensive tariff policies.

These tariffs add pressure to China’s slowing economy, prompting officials to boost efforts for increasing domestic consumption in anticipation of the escalating trade conflict.

US stock futures plummeted on Friday following China’s retaliation. Dow futures dropped 1,000 points or 2.3%, the S&P 500 was set to open 2.4% lower, and the Nasdaq Composite was predicted to start 2.7% down. In Europe and the UK, stocks fell more than 3%, heading for their worst performance in years.

Markets have been unstable for days: Thursday saw the Dow fall over 1,600 points, or nearly 4%. The S&P 500 slipped almost 5%, and the Nasdaq fell nearly 6%. Each major US index experienced its poorest performance in five years, since the pandemic.

Stay informed as this situation develops.