China has sharply escalated its trade conflict with the United States (U.S.) by announcing an 84% tariff on all U.S. goods effective Thursday 10 April, 2025 alongside sanctions targeting American companies.
The move comes as a direct retaliation to President Donald Trump’s imposition of a 104% tariff on Chinese imports, which took effect at midnight today. This tit-for-tat exchange marks a significant intensification of the ongoing trade war between the world’s two largest economies, sending shockwaves through global markets and drawing sharp reactions from stakeholders.
China’s Ministry of Commerce declared the 84% tariff — up from a previously announced 34% — as a necessary countermeasure to what it called “unilateral bullying” by the U.S.
In addition, Beijing has imposed export controls on 12 U.S. companies and added six more to its “unreliable entities” list, effectively barring them from conducting business in China or with Chinese firms. These sanctions target industries ranging from defence to technology, amplifying the economic stakes.
“The U.S. move undermines China’s legitimate rights and interests,” a ministry spokesperson stated. “China will fight to the end to protect its sovereignty and economic stability.”
The White House responded swiftly, with Press Secretary Karoline Leavitt defending Trump’s tariff hike. “China’s decision to retaliate was a mistake,” Leavitt said during a briefing today. “When America is punched, President Trump punches back harder. These tariffs are about ensuring fair trade and protecting American workers.”
She emphasised that the 104% tariff, which builds on earlier levies, aims to address China’s “mistreatment” of U.S. economic interests, though she offered no immediate plans for further escalation.
President Trump, taking to Truth Social, remained defiant. “China thought they could push us around, but I’ve raised tariffs to 125% on them—effective now! BE COOL, America, we’re winning this!” he posted this afternoon, referencing an additional executive order that pushes the total tariff rate even higher.
Trump also announced a 90-day pause on tariffs for most other trading partners, lowering their rates to 10%, signaling a strategic pivot to isolate China in the trade dispute.
Reactions from other stakeholders were mixed. U.S. Treasury Secretary Scott Bessent, speaking on Fox Business, called China’s escalation “unfortunate” and a “loser” for Beijing, arguing that it would further imbalance their economy.
Meanwhile, JPMorgan Chase CEO, Jamie Dimon, warned of dire consequences, predicting a likely U.S. recession as markets reel from the uncertainty. “A 2,000-point drop in the Dow feeds on itself,” Dimon said, noting the impact on consumer confidence and spending.
The stock market reflected this unease today. After China’s announcement, Wall Street opened with mixed trading: the Dow fell 0.5%, the S&P 500 dipped 0.19%, and the Nasdaq rose 0.7%. However, a late recovery followed Trump’s tariff pause announcement, with U.S. stock indexes jumping and bond yields easing from earlier highs.
Globally, the fallout was stark — European markets closed down 2.9% to 3.3%, and Asia’s markets (excluding Shanghai, up 1.3%) dropped 1% to 4%.
Oil prices hit four-year lows, with Brent crude falling 3.76% to $60.46 a barrel, underscoring fears of weakened demand amid a potential global downturn.
However, the trade war shows no signs of abating, with both nations digging in. Economists and business leaders brace for higher consumer prices and disrupted supply chains, while the world watches to see if negotiations — or further escalation — lie ahead.
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