China announced sweeping new retaliatory tariffs on Friday in response to the Trump administration’s latest round of trade restrictions, marking a sharp escalation in the ongoing U.S.-China trade war and triggering sharp declines in global financial markets. Beginning April 10, Beijing will impose 34 percent import duties on all American goods, matching the 34 percent tariffs President Donald Trump unveiled earlier this week on Chinese imports.
The Chinese government described the U.S. policy as a violation of international trade norms. “This practice of the U.S. 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.
Friday’s announcement from Beijing, made during the Tomb Sweeping Festival, also included a range of additional economic measures. The Chinese Ministry of Commerce imposed export restrictions on seven types of rare-earth minerals, including samarium, gadolinium, and terbium. It also announced that 16 U.S. companies, such as High Point Aerotechnologies and Universal Logistics Holdings Inc., had been added to its export control list.
“Under the new rule,” the state-run China Daily reported, “Chinese companies are prohibited from exporting dual-use items to these 16 U.S. entities. Any ongoing related export activities should be immediately halted, said the Ministry of Commerce.”
Beijing also launched anti-dumping investigations into imported medical CT X-ray tubes from the U.S. and India and added 11 American companies to its “unreliable entity list,” which includes firms involved in drone manufacturing and other strategic sectors.
These countermeasures follow Trump’s announcement on Wednesday that the U.S. would impose an additional 34 percent tariff on all Chinese goods entering the country. This move comes on top of two earlier rounds of 10 percent tariffs levied this year. Combined with previous trade restrictions, Chinese goods entering the U.S. now face cumulative tariffs exceeding 54 percent.
China’s new tariffs are more sweeping than previous rounds of retaliation. Previously, Beijing responded with sector-specific levies on U.S. agricultural goods and fuel, while also taking steps against certain American firms and expanding export controls. “This is a significant escalation of China’s response,” wrote Leah Fahy, a China economist at Capital Economics, in a research note. “Xi Jinping appears to feel that China’s economy is strong enough to withstand whatever Trump throws at it next.”
Analysts believe the tariffs are likely to impact roughly half a trillion dollars in trade between the world’s two largest economies and fundamentally reshape a relationship defined by decades of economic interdependence.
The fallout from this week’s announcements rippled through global financial markets. U.S. stocks fell sharply Friday following China’s retaliation. The Dow Jones Industrial Average dropped more than 1,000 points, or 2.7 percent, while the S&P 500 declined more than 3 percent and the Nasdaq Composite fell 3.5 percent. European and UK markets also posted losses of over 3 percent, experiencing their worst single-day performances in years.
Thursday had already seen significant losses. The Dow fell more than 1,600 points, or nearly 4 percent, while the S&P 500 fell nearly 5 percent and the Nasdaq plunged nearly 6 percent. Each major U.S. index recorded its worst performance in about five years, since the pandemic.
U.S. Secretary of State Marco Rubio acknowledged the volatility, stating on Friday that “markets are crashing” but expressing confidence in long-term adjustment. “Businesses around the world, including in trade and global trade, they just need to know what the rules are. Once they know what the rules are, they will adjust to those rules,” Rubio told reporters at a meeting of NATO foreign ministers in Brussels.
China’s Foreign Ministry also reiterated its call for dialogue and mutual respect. “Trade and tariff wars have no winners. Protectionism leads nowhere,” said a spokesperson on Thursday. “We urge the U.S. to stop doing the wrong thing, and resolve trade differences with China and other countries through consultation with equality, respect, and mutual benefit.”
Other countries affected by Trump’s global tariffs are preparing their own responses. European Commission President Ursula von der Leyen said Thursday that the E.U. was “already finalizing the first package of countermeasures in response to tariffs on steel, and we are now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.” Canadian Prime Minister Mark Carney echoed those sentiments. “We are going to fight these tariffs with countermeasures,” he said. “In a crisis, it’s important to come together and it’s essential to act with purpose and with force. And that’s what we will do.”
The strategic nature of China’s retaliatory tariffs and restrictions drew analysis from U.S.-based policy experts. “By matching Trump’s tariffs, China is no longer nibbling at the edges—it’s mirroring U.S. actions head-on. This is not blind retaliation, but a clear recalibration,” said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies. Singleton noted that Beijing is targeting politically sensitive U.S. sectors—such as agriculture and industrial manufacturing—while simultaneously applying rare-earth restrictions and maintaining a posture of openness in its broader economy.
However, the trade war presents challenges for both sides. China’s economy has shown signs of slowing, with government officials recently working to stimulate domestic consumption. Larry Hu, chief China economist at Macquarie Group, warned that the current escalation could reduce China’s GDP growth by up to 2.5 percentage points this year. “The impact could manifest itself through multiple channels such as falling U.S. demand for Chinese goods, the potential global economic slowdown and the hit on export re-routing,” Hu wrote.
Export re-routing, a strategy China employed during Trump’s first term, refers to the diversion of goods through third countries to bypass tariffs. During previous trade conflicts, Southeast Asian and Latin American countries saw increased trade as intermediaries. If the conflict intensifies further, those patterns could return or expand.
Trump’s latest actions have reportedly been justified on national security grounds, with White House officials citing the need to stop illicit fentanyl shipments from China to the U.S. However, economic analysts have raised doubts about the effectiveness of tariffs in combating narcotics trafficking, and critics have pointed out the broader costs to American households and businesses.
For now, with tariffs climbing and retaliatory actions multiplying, the trade war shows no sign of easing. With both countries entrenched in increasingly aggressive positions and global institutions like the World Trade Organization sidelined, the possibility of long-term economic decoupling between the U.S. and China appears more real than at any point in recent history.
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