Tensions between the world’s two largest economies continue to escalate. Following the United States’ sweeping tariff hike announced by President Donald Trump, China has hit back with a major retaliatory measure, signalling a deepening trade war with global implications.
China announced on April 4, 2025, that it will impose a 34% tariff on all U.S. imports starting April 10. This decision follows the United States’ recent move to impose a 34% reciprocal tariff on Chinese goods under its “Liberation Day” initiative. The matching rate signals China’s intention to respond proportionately to the U.S.’s protectionist measures.
China’s Ministry of Commerce also revealed new restrictions on the export of rare earth elements, which are crucial to manufacturing products such as electric vehicle batteries and semiconductors. These additional controls could disrupt the global electronics and green energy industries.
The Chinese government has listed 27 U.S. companies for trade sanctions or export controls. Of these, 16 firms are now banned from receiving dual-use goods. The list includes High Point Aerotechnologies and Universal Logistics Holding, companies involved in defence and transport services.
China has filed a case with the World Trade Organization, challenging the legality of the U.S.’s tariff hikes. This move aims to trigger formal dispute resolution mechanisms and bring global attention to the escalating conflict.
Earlier in February 2025, China had imposed a 15% tariff on coal and LNG imports from the U.S. It also introduced a 10% tariff on American crude oil, agricultural machinery, and large-engine cars, adding pressure on specific U.S. industries.
With both nations locked in a tit-for-tat tariff battle, the global economy faces increasing uncertainty. China’s latest response underscores its readiness to defend its trade interests through both direct tariffs and broader policy tools. All eyes now remain on how the U.S. will respond and whether any diplomatic resolution is in sight.
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Published on: Apr 4, 2025, 7:58 PM IST
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