In a dramatic escalation of trade tensions between the world’s two largest economies, China announced on Friday, April 4, 2025, that it will impose an additional 34% tariff on all US goods starting April 10. This sweeping retaliation comes just one day after US President Donald Trump unveiled his own extensive tariff plan targeting imports from around the world, with particularly steep duties on Chinese products.
Immediate Response to Trump’s Tariffs
China’s Ministry of Finance declared that the 34% tariff would apply across the board to all US imports entering China, directly matching the percentage Trump imposed on Chinese goods. “For all imported goods originating from the US, an additional tariff of 34 percent on top of the current applicable tariff rate will be imposed,” Beijing’s finance ministry stated, according to reports from Reuters and Agence France-Presse.
This tit-for-tat response follows Trump’s Wednesday announcement of a universal 10% tariff on all imports entering the US, plus targeted “reciprocal tariffs” against specific nations. For China, this meant an additional 34% on top of existing duties, bringing the total US tariff on Chinese goods to 54% – approaching the 60% rate Trump had discussed during his presidential campaign.
Beijing had urged Washington to withdraw these measures before announcing its countermeasures. “China strongly opposes this action and will implement countermeasures to uphold its rights and interests,” the Commerce Ministry stated as tensions continued to rise.
Strategic Export Controls and Entity Restrictions
Beyond tariffs, China’s response includes targeted restrictions on critical resources and companies. The Commerce Ministry announced export controls on seven rare earth elements effective immediately: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These elements are vital for high-tech industries including semiconductor production, electric vehicle manufacturing, and military equipment development.
China also added 11 American companies to its “unreliable entity” list, allowing authorities to impose punitive measures against them. Additionally, 16 US entities – including High Point Aerotechnologies, Universal Logistics Holdings, and Source Intelligence – have been placed on China’s export control list, prohibiting the export of dual-use items to these companies. Any ongoing related export activities must be immediately suspended, according to the official announcement.
“The purpose of the Chinese government’s implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfill international obligations such as non-proliferation,” the Commerce Ministry explained in its statement.
Implementation Timeline and Exceptions
China’s finance ministry provided some flexibility in the implementation timeline. Shipments that leave their origin before the April 10 deadline and arrive by May 13, 2025, will not be subject to the additional tariffs. “If the goods have been shipped from the place of departure before 12:01 on April 10, 2025, and are imported between 12:01 on April 10, 2025, and 24:00 on May 13, 2025, the additional tariffs prescribed in this announcement will not be levied,” the State Council Tariff Commission clarified.
Legal Justification and Criticisms
The Chinese government framed its decision as a response to what it considers illegitimate trade practices by the US. He Yadong, spokesperson for China’s Ministry of Commerce, condemned the US action, calling the Section 232-based tariffs “outdated and illegitimate.” He pointed out that the World Trade Organization has already ruled such measures as violations of global trade rules.
Beijing criticized the US for reviving a six-year-old auto industry investigation as justification for imposing tariffs, branding it as trade protectionism disguised as national security concerns. The Chinese Commerce Ministry characterized Trump’s move as “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 stated that its retaliatory measures were made in accordance with China’s Customs Law, Foreign Trade Law, and relevant international legal principles, with approval from the State Council.
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Market Reactions and Economic Impact
The escalating trade tensions have triggered significant volatility in global markets, with major indices experiencing sharp declines and fears of a global recession intensifying. Wall Street futures tumbled after China’s announcement, extending a selloff that began with Trump’s tariff declaration.
Trump sought to reassure investors amid the market turmoil, declaring on his social media platform: “To the many investors coming into the United States and investing massive amounts of money — my policies will NEVER change. This is a great time to get rich, richer than ever before!!!”
However, economic analysts warn that the mutual tariffs could disrupt supply chains, increase consumer prices, and potentially slow economic growth in both countries and globally. The Chinese Commerce Ministry warned that disrupting the global automotive supply chain would harm—not help—US industry, stressing that such actions only highlight America’s growing unilateralism and economic “bullyism.”
Historical Context of US-China Trade Relations
This latest exchange represents a significant escalation in trade tensions that began during Trump’s first administration. In 2020, the two countries signed a “Phase 1” trade agreement that required China to increase purchases of US exports by $200 billion over two years. Beijing failed to meet these targets, citing the effects of the COVID-19 pandemic.
Chinese customs data shows that in 2017, before the trade war began, China purchased $154 billion in US goods. That figure rose to $164 billion last year, highlighting the complex economic ties between the two nations despite ongoing disputes.
Since Trump returned to office in January 2025, he had already imposed two rounds of 10% additional tariffs on Chinese imports, first in February and then again in March, which the White House justified as a measure to combat illicit fentanyl exports from China. China had previously responded with moderate retaliatory tariffs, targeting US agricultural products, fuel, and select American firms, while strengthening its export controls.
Trump also recently took action by signing an executive order to close a trade loophole referred to as “de minimis,” which previously allowed small packages from China and Hong Kong to enter the US without paying duties.
Global Implications and Broader Tariff Strategy
The US-China trade war is occurring amid a broader protectionist strategy by the Trump administration. Beyond China, Trump’s new tariff structure imposes varying rates on different countries: the European Union faces a 20% tariff, Vietnam 46%, Taiwan 32%, Japan 24%, India 26%, and South Korea 25%. Other nations facing significant tariffs include Thailand (36%), Switzerland (31%), Indonesia and Malaysia (32% and 24% respectively), and Cambodia (49%).
These wide-ranging tariffs have raised concerns about prolonged economic conflict between major economies, with potential repercussions for global trade and economic stability. The WTO may become a battleground as China has already announced plans to file a lawsuit against the US tariffs through this international body.
Despite growing tensions, Trump acknowledged his “great respect for President Xi, great respect for China” during his Rose Garden briefing on Wednesday, while maintaining that China had been “taking tremendous advantage of us.” He added, “They understand exactly what’s happening and … they’re going to fight.”
As the world’s two largest economies engage in this escalating trade battle, businesses, consumers, and global markets brace for potential disruptions and economic fallout that could extend far beyond the borders of the United States and China.
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