China on Wednesday retaliated against President Donald Trump’s tariffs with a new 84% levy on exports from the U.S., Beijing announced.
The Chinese tariffs, the latest escalation stemming from Trump’s global trade war, will particularly be devastating for U.S. farmers who are major exporters to China.
The U.S. exports about $145 billion in goods to China a year with oilseeds and grains dominating, followed by oil and gas, says the U.S.-China Business Council.
The Council also said that China was the third-largest export market for the U.S. in 2023, following Canada and Mexico.
The escalating trade tit-for-tat started when Trump put a 10% tariff on imports from China, alleging it was failing to control the flow of fentanyl out of the country. He later doubled that to 20%.
Subsequently, Trump introduced a reciprocal tariff of 34% on China, which stacked on the drug tariffs. When the Chinese retaliated with a matching levy, Trump added another 50%, meaning that effective 12:01 a.m. ET Wednesday, the U.S. now charges 104% tariff on imports from China.
The reciprocal tariffs triggered dove on the markets with U.S. stock futures, which had been mostly flat in the early morning, taking a sharp leg down on the retaliation news and were about 1.5% lower as of 7:30 a.m. ET.
And this forced crude oil price to plunge, falling another 6% to around $56 a barrel.
Meanwhile U.S. Treasury bonds, normally a safe haven in times of crisis, sank instead, with yields rising 13 basis points to about 4.39%.
Wednesday’s newest measures from Beijing include adding 11 American companies to a so-called “unreliable entities” list that would bar Chinese companies from selling them dual-use goods. Among the companies are American Photonics, and SYNEXXUS, both of whom work with the American military.
So far, China has not appeared interested in bargaining. “If the U.S. truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit,” said Ministry of Foreign Affairs spokesman Lin Jian Wednesday.
Meanwhile, the European Union (EU) on Wednesday announced its own retaliatory measures against the U.S. with the 27-country trading bloc announcing tariffs on more than $22 billion in U.S. products, including soybeans, motorcycles and beauty products, according to AFP.
“The EU considers U.S. tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy,” the European Commission said in a statement issued after EU member states approved the measures.
The Trump administration has imposed a 25% tariffs on vehicles imported from the EU, along with a 20% reciprocal levy.
Written with reports from CBS News and Axios
