The economic rivalry between the United States and China took a sharp turn this week, with Beijing launching a series of retaliatory measures against Washington’s escalating tariff regime. As tensions rise, global markets are showing signs of strain, and neither side appears willing to back down.
In a statement released Friday, China’s Ministry of Finance announced a 34% tariff on all imports from the United States, set to begin on April 10. The Chinese government emphasised that the decision is a direct response to Washington’s new wave of tariffs and called for disputes to be resolved through fair and equal negotiation—rather than what it described as unilateral pressure.
China Declares New Export Restrictions
Beyond tariffs, China also declared new export restrictions on medium and heavy rare earth elements, which are crucial in the production of high-tech devices like EV batteries and computer chips. These curbs will go into effect on April 4 and are expected to significantly affect the global tech supply chain. China currently controls the vast majority of the world’s refined rare earth supply.
Further escalating the conflict, Beijing added 30 more US companies—mainly in the defense and aerospace sectors—to its export control list, effectively cutting them off from the Chinese market. It also halted poultry imports from two American suppliers, citing repeated detection of banned chemicals in shipments.
US President Trump Slams China
President Donald Trump fired back at the announcement, accusing China of losing its grip under pressure. “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” he posted on Truth Social in all caps, echoing the aggressive rhetoric that has defined his trade policy since taking office.
Speaking at the White House earlier this week, Trump defended his tariff strategy, saying American taxpayers have been exploited for decades and that the new policies were part of a long-overdue correction. “This stops now,” he said.
US Tariffs on China Hit 54%
The latest move from the US came on Wednesday, when the administration imposed an additional 34% duty on Chinese imports. Combined with a previous 20% levy introduced earlier this year, total new tariffs against Chinese goods now stand at 54%—approaching the 60% target Trump touted during his presidential campaign.
Starting Saturday, nearly all foreign imports to the US—including those from China—will be subject to a baseline tariff of 10%, with additional reciprocal tariffs set to follow on April 9.
Market Slides as Trade War Escalates
Meanwhile, financial markets are already reacting to the escalating trade war. The FTSE 100 index in London plunged more than 300 points, marking its worst single-day drop since early 2023. In broader European markets, the Stoxx 600 index dropped by 4.4%, and Brent crude oil prices tumbled by 6.6%, falling to $65.50 per barrel—a low not seen since mid-2021.
Economists warn that a prolonged standoff could disrupt global supply chains, particularly in technology and manufacturing sectors, while also fueling inflation and uncertainty in financial markets worldwide.
As both nations remain firm on their positions, hopes for a peaceful resolution appear increasingly dim.
