China hits back at US with 34% tariff on American imports in retaliation for Trump’s levies

China will impose a 34 per cent tariff on imported American goods in addition to existing duties in response to similar moves by the United States, further escalating trade tensions between the world’s two biggest economies. The Chinese tariff will apply from April 10, according to the State Council, China’s cabinet. The retaliation announced on Friday came two days after the US unveiled a 34 per cent tariff on Chinese goods. The swift response suggests that Beijing is going to play tough, instead of entering into negotiations with Washington. Earlier, US President Donald Trump indicated that he was willing to cut a deal in exchange for Beijing’s approval to sell social media company TikTok. As part of the retaliatory measures, Beijing has also suspended the eligibility of six US-linked companies to export sorghum, poultry products and poultry bone meal to China. It has also put export controls on 16 American companies, barring Chinese companies from supplying them with dual-use items – goods that have both civilian and military applications. These 16 US entities are involved in areas such as defence, aerospace, drone making, intelligence and logistics. The Coalition For A Prosperous America, an advocacy group championing trade-protectionist policies, is also among those blacklisted. “These entities have engaged in activities that potentially endanger China’s national security and interests,” the ministry said. It said the export of dual-use items to these entities would be prohibited and ongoing exports to them must stop immediately. Another 11 US companies, including US drone manufacturer Skydio, were put on the list of unreliable entities. China also tightened export controls on more rare earth products, a decision that will affect supply chains for aircraft and spacecraft, nuclear power, energy, medical equipment, laser devices, and other hi-tech industries. The controls cover the rare earths samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium and their alloys. Suppliers have to apply for government permission to export these products, and Chinese customs will be able to seize any goods suspected of containing undeclared restricted materials. The elements are critical for making strong magnetic parts in high-performance motors, nuclear reactor control rods, electronics and optics equipment, lightweight alloy materials for aerospace devices, MRI imaging machines, fuel cells, superconductors and semiconductors. China imposed similar export controls on the critical minerals gallium and germanium in July 2023; on tungsten, tellurium, bismuth, molybdenum and indium in February last year; and on antimony in August. “The relevant items have dual-use properties, and it is an internationally accepted practice to impose export controls on them,” the ministry said. “China is willing to strengthen foreign cooperation and promote compliant trade through bilateral export control dialogue and exchange mechanisms.” China also launched an anti-dumping investigation into certain imports of medical computed tomography, or CT, tubes from the United States and India, as well as a separate industrial competitiveness investigation into broader imports of medical CT tubes. The restrictions are part of an accelerating trade war that wiped US$2.5 trillion off US markets on Thursday, inflicting the steepest declines on Wall Street since the start of the Covid pandemic in 2020. Beijing announced the tariff just before the opening of the US markets, sending stocks on another tumble on Friday amid a global markets sell-off. Oil prices also plunged by 8 per cent on Friday, heading for their lowest close since the middle of the pandemic in 2021. Trump responded quickly to Beijing’s tariff announcement, saying on social media that China “played it wrong”. “China played it wrong, they panicked – the one thing they cannot afford to do!” Trump wrote in all caps. A day earlier, the Chinese ministry condemned the US’ new tariff regime, saying it threatened the hard-won balance achieved through years of multilateral trade negotiations. “This is a typical act of unilateral bullying,” the ministry said, urging Washington to “immediately” remove the tariffs and resolve any disputes through “fair and equal dialogue” with its trade partners. Su Yue, principal economist for China with the Economist Intelligence Unit, said China’s counter-attack “might reflect its assessment that the US has little room left for further escalation in its China policy”, adding that it strengthened China’s bargaining position for trade negotiations. “We expect this round of actions to increase the likelihood of negotiations, although the possibility of further trade-war escalation cannot be ruled out. Even if negotiations take place, a portion of the newly imposed tariffs is likely to remain permanently,” Su said. “The risk of a global trade war is also increasing.” Ding Shuang, chief Greater China economist at Standard Chartered, also said “the latest tariffs are so steep that there’s little room left for compromise”. “Any further escalation would have diminishing returns. And if China were to retaliate with broad-based tariffs of its own, the impact on the US could far outweigh the damage China would take from reciprocal measures. “Beijing’s stance now is clear: no concessions. That also means talks over TikTok will not be wrapped up quickly – China does not want to appear as if it’s backing down too easily.” Lynn Song, chief economist for Greater China at Dutch investment bank ING, said Beijing’s response was an “eye for an eye”. He said China’s blanket tariffs “show that China is not willing to enter into further negotiations from a position of weakness”. “So far, the US companies on the unreliable entity list have not been hit with significant measures but open them up to possible measures in the future to limit their presence in the China market,” Song said. Separately, China’s market regulator said on Friday it would investigate industrial materials maker DuPont China for alleged violation of the country’s anti-monopoly law. It was “the first wholly-owned foreign investment company approved by the Chinese government” when it registered in Shenzhen in 1988, according to the company. Additional reporting by Siqi Ji

China hits back at US with 34% tariff on American imports in retaliation for Trump’s levies

The tariff comes into effect on April 10 and is part of a raft of measures that includes more rare earths controls

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