China announced today retaliatory tariffs of 84 percent on U.S. imports, further fuelling a trade war between the world’s two biggest economies. China increased its intended levy of 34 percent on U.S. imports by another 50 percentage points, matching the additional charge that U.S. President Donald Trump has already imposed on Chinese goods.
Trump’s sweeping tariffs took effect earlier on Wednesday. China was the hardest-hit nation, with a charge of 104 percent on all its goods.
“The U.S.’s practice of escalating tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously damages the rules-based multilateral trading system,” China’s State Council Tariff Commission said in a statement announcing the fresh tariffs.
China imposes export controls
In addition to increasing charges on U.S. imports effective April 10, China’s commerce ministry imposed export controls on 12 American companies and added six more U.S. firms to its “unreliable entity list.” Companies on that list are banned from trading or investing in China. Furthermore, China filed a complaint to the World Trade Organization over the latest U.S. tariffs, according to the commerce ministry.
China’s trade surplus with the U.S. widened to $295.4 billion last year from $279.1 billion in 2023, according to U.S. Census data. The goods trade gap peaked in 2018 at $418 billion, the same year Trump, in his first term as president, imposed tariffs on Chinese outbound shipments.
The European Union is also preparing its own retaliatory measures for later on Wednesday. The bloc faces a 25 percent import tariff on steel and aluminium and cars, as well as the new broader tariffs of 20 percent for almost all other goods.
The European Commission proposed on Monday extra duties of 25 percent on a range of U.S. imports in response to the U.S. metals tariffs. It is still assessing how to respond to the car and broader levies.
Read: Trump says U.S. will announce “major” tariff on pharmaceutical imports
Markets react to escalating trade tensions
Since Trump announced the sweeping tariffs last Wednesday, the S&P 500 has suffered its deepest loss since the benchmark’s creation in the 1950s. It is now nearing a bear market, defined as 20 percent below its most recent high. As of 12:10 GMT, the index is down 1.57 percent. Meanwhile, the Nasdaq Composite declined 2.15 percent.
In Europe, the EUROSTOXX 50 fell 3.89 percent, while the FTSE 100 Index dipped 3.52 percent.
The Asian stock market also took a hit, with the Nikkei falling 3.93 percent. Meanwhile, the broader Topix index fell 3.40 percent to 2,349.33.
