China announced on Friday it would impose 34% tariffs on all imports from the United States starting April 10. This move is in retaliation to additional tariffs unveiled by US President Donald Trump on Chinese goods. “This practice of the US is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,” China’s State Council Tariff Commission said in a statement.
Since returning to power in January, Trump has already levied additional duties on Chinese imports, which the White House claimed was necessary to curb the flow of illicit fentanyl from China to the US. Coupled with earlier tariffs, Chinese goods entering the US would face duties exceeding 54%. China’s latest retaliatory action is more comprehensive than previous measures, targeting a broader range of American goods.
Earlier responses had included tariffs on US agricultural products and fuel and actions against some American firms. US stocks fell sharply on Friday after China’s announcement. The Dow Jones fell more than 1,000 points, or 2.7%, while the S&P 500 dropped over 3%, and the Nasdaq Composite lost 3.5%.
China’s retaliatory tariffs escalate tensions.
European and UK markets also faced substantial declines. US Secretary of State Marco Rubio acknowledged the impact on global markets but expressed confidence that they would adjust.
“Businesses around the world just need to know what the rules are. Once they do, they will adjust to those rules,” Rubio told reporters. Analysts believe this escalation could reshape the trade dynamics significantly.
Larry Hu, chief China economist at Macquarie Group, wrote that the trade war could reduce China’s economic growth by up to 2.5 percentage points this year. He also noted that Trump has effectively raised the average US tariff rate on Chinese products to 69%. As the trade war intensifies, businesses with supply chains rooted in China face compounded challenges.
They must navigate the high US levies on Chinese imports and tariffs affecting other Asian countries due to broad-based US tariffs. The situation remains fluid as both nations negotiate and respond to each other’s trade policies.
Image Credits: Photo by John Simmons on Unsplash
