April 4, 2025
In retaliation for President Donald Trump’s latest round of duties, China has announced a sharp imposition of 34% tariffs on all U.S. import, escalation its trade dispute with the United States.
This move pushes the two largest economies closer to a full-blown trade war.
The new tariffs, which match Trump’s recent increase, will take effect on April 10, just one day after the U.S. implements its own “reciprocal” levies.
China’s announcement sent shockwaves through global financial markets.
Futures tracking the S&P 500 fell by 2%, on Friday, while the Europe-wide Stoxx 600 dropped 4.4%. The fallout extended to other major indices, with the FTSE 100 slumping 2.6% and Germany’s DAX losing 4.8%.
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Investors sought refuge in U.S. Treasuries, driving yields down by 0.15 percentage points to just below 3.9%, their lowest level since early October.
The total levies on Chinese exports to the U.S. are now set to exceed 60%, surpassing the worst-case scenario Beijing had anticipated during Trump’s election campaign.
The Ministry of Commerce in China denounced the U.S. tariffs as “a typical unilateral bullying move” that violates international trade rules and “seriously damages the legitimate rights and interests of China.”
Trump’s aggressive tariff strategy has also disrupted global markets. On Thursday alone, approximately $2.5 trillion in market value was wiped out from Wall Street stocks, erasing all of the dollar’s post-election gains.
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The ripple effects have left businesses and investors grappling with uncertainty, particularly those with supply chains rooted in China.
The total U.S. charges on Chinese goods now exceed the 60% threshold, a figure that could severely disrupt supply chains and trade flows.
With heightened tension the trade war has exposed the fragility of global economic interdependence. As both nations dig in their heels, the path to resolution remains uncertain.
