Trade Tariff War Intensifies: China Retaliates Against US

China has officially announced it will raise tariffs on all US goods from 34% to 84%, effective April 10, 2025. This dramatic increase comes as a direct retaliation to the Trump administration’s imposition of a 104% tariff on Chinese imports that went into effect on April 9, 2025.

Timeline of Escalation

The current trade conflict has intensified rapidly over the past few months:

• February 2025: The Trump administration imposed an initial 10% tariff on all goods from China Al Jazeera
• April 3, 2025: China announced its third round of retaliatory actions, including a 34% additional tariff on all US goods Holland & Knight
• April 8, 2025: The US government increased its tariffs on Chinese goods to 104% (combining a 50% increase with the existing 34% reciprocal tariffs plus previous measures) Euronews
• April 9, 2025: China announced it would raise tariffs on US imports from 34% to 84%, effective April 10 The Guardian

Official Statements

China’s Position

The Chinese Ministry of Finance stated they will impose 84% tariffs on US goods starting Thursday, April 10, emphasizing that China does not want a trade war but “will fight to the end” if necessary Reuters.

China’s commerce ministry released a statement saying, “There are no winners in a trade war. China does not want one, but the government will never allow the legitimate rights and interests of the Chinese people to be harmed or taken away.” The ministry also criticized the US approach as “classic unilateralism, protectionism and economic bullying” Reuters.

In a white paper released by the State Council Information Office, China stated that it “does not deliberately pursue a trade surplus” and that the trade imbalance is the result of structural issues in the US economy and the international division of labor Reuters.

US Position

President Trump has urged Americans to “BE COOL! … THIS IS A GREAT TIME TO BUY!!!” on social media as markets reacted negatively to the tariff escalation CNBC. In another statement on Truth Social, he encouraged companies to relocate to the US: “This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing. ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!” The Guardian.

The White House press secretary Karoline Leavitt told a briefing, “To countries around the world, bring us your best offers and he will listen,” adding that “Deals will only be made if they benefit American workers” CBS News.

Products and Sectors Affected

China’s 84% tariff will apply to all goods originating from the United States, making this a broad-based measure affecting the entire spectrum of US exports to China Euronews.

The most significantly affected US exports to China are likely to include:

1. Agricultural products, especially soybeans, which have historically been among the largest US exports to China NBC News
2. Energy products, including crude oil NBC News
3. High-end electronics NBC News
4. Manufacturing sectors that are part of complex supply chains, especially in Asian regions CSIS

On the US side, the 104% tariff on Chinese goods is expected to significantly impact:

1. Consumer electronics, including products like iPhones CBS News
2. Apparel and clothing made in China CBS News
3. Everyday consumer goods from China that are common in US households

Economic Impact

Market Reactions

Global markets have reacted negatively to the escalating trade tensions:

• US markets: The S&P 500 dropped by 0.4% and the Dow Jones industrial average fell by 0.7% The Guardian
• European markets: The FTSE 100 fell by 3.7% and the Stoxx 600 by 3.6% The Guardian
• Asian markets: Chinese, Hong Kong, and Taiwan stocks have also fallen significantly The Guardian
• Oil markets: Oil prices plummeted with Brent dropping below $60 a barrel Reuters
• Bond markets: Yields are rising as investors sell government debt, reflecting increased volatility and uncertainty The Guardian

Predicted Economic Consequences

Economists and analysts are forecasting several adverse consequences:

1. Increased inflation pressure in the US as tariffs drive up costs for imported goods Euronews
2. Weakened US industrial base as manufacturing faces higher input costs Euronews
3. Increased risk of a US economic recession Euronews
4. Potential 2.4% decline in China’s GDP in 2025 alone according to recent estimates CSIS
5. Higher consumer prices in the US for a wide range of goods CBS News
6. Rising borrowing costs as bond yields increase The Guardian
7. Global recession concerns as trade volumes are expected to decline significantly The Guardian

Current Trade Relations

China’s trade surplus with the US widened to $295.4 billion last year from $279.1 billion in 2023 Reuters. The US administration has cited this trade imbalance as part of its justification for imposing tariffs, while China maintains that the surplus is the inevitable result of structural factors in the global economy.

Long-Term Implications

The long-term implications of this escalating trade war could include:

1. Restructuring of global supply chains as companies seek to avoid tariffs by relocating production CSIS
2. Potential shift in China’s economic strategy toward technology-led growth and boosting domestic consumption CSIS
3. Realignment of trade relationships globally as countries adjust to the new reality of US-China tensions
4. Increased tensions in other areas of US-China relations beyond trade, potentially affecting geopolitical stability
5. Potential for further escalation if negotiations fail to resolve the dispute

Next Steps

Reports indicate that China’s top leaders plan to meet as soon as Wednesday to hammer out measures to boost the economy and stabilize capital markets in response to the US tariffs Reuters.

Meanwhile, there are no immediate signs of formal negotiations between the US and China to resolve the dispute. Both sides appear to be digging in for what could be a prolonged trade conflict.

As of April 9, 2025, the trade war between the US and China continues to escalate with no clear resolution in sight. The upcoming implementation of China’s 84% tariff on US goods on April 10 marks a significant escalation that will likely have far-reaching economic consequences globally.