CITIZENS COMPASS– China has declared a 34% retaliatory tariff on all imports from the United States, responding to Donald Trump’s latest tariff hikes.
This decision has escalated the ongoing trade conflict and brought the world closer to a full-scale trade war. In reaction to Beijing’s move, global stock markets saw further declines. On Friday, futures tracking the S&P 500 dropped by 3%, while the European Stoxx 600 fell by 4.3%
The new tariffs, which mirror Trump’s recent increase in duties on Chinese goods, will take effect on April 10, just one day after the U.S. tariffs are implemented. In addition to the tariff increase, China announced further measures, such as imposing restrictions on rare earth exports and launching an investigation into DuPont’s China subsidiary, the U.S. chemical giant.
Despite the global market turmoil, President Trump remained defiant and reiterated his commitment to his policies. “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he posted on his Truth Social network. “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!”
Trump’s decision to impose a 34% tariff on Chinese imports will bring the total tariffs on Chinese goods to more than 60%, surpassing the levels he had threatened during his election campaign last year. Beijing has strongly criticized the new U.S. tariffs, calling them “a typical unilateral bullying move” that violates international trade rules and harms China’s legitimate interests.
China’s retaliation is expected to hit U.S. agricultural exports hardest, especially commodities like soybeans, wheat, and corn. The U.S. also exports significant amounts of pharmaceuticals, crude oil, petroleum gas, and liquefied natural gas to China. This trade dispute comes at a sensitive time for Chinese President Xi Jinping, as he relies on exports to help stabilize the economy, which has been struggling with a property sector downturn and deflation.
Trump’s tariff policies have caused significant volatility in global markets. The U.S. stock market saw a dramatic decline, wiping out about $2.5 trillion in market value on Thursday. This was followed by further drops on Friday, with the FTSE 100 falling 3.8% and Germany’s DAX dropping 3.7%. In response, investors flocked to U.S. Treasuries, pushing the 10-year yield down by 0.16 percentage points to 3.9%, the lowest it’s been since early October.
Andrew Gilholm, head of China analysis at consultancy Control Risks, warned that China could suffer significant economic damage by fully matching U.S. tariffs, considering its trade surplus with the U.S. and the tariffs already in place. Additionally, China announced export bans on seven types of rare earths, further escalating tensions. U.S. tech companies, including drone makers Skydio and Brinc Drones, were also added to China’s “unreliable entity” list, which prohibits Chinese suppliers from selling components to these companies.
The trade war between the U.S. and China continues to evolve, with no signs of immediate resolution, and it remains to be seen how both nations will handle the economic fallout in the coming months.
