Beijing’s counterpunch deepens global trade crisis as US raises duties to 125%; markets reel, WTO challenge launched
China has announced it will impose tariffs of 84% on all imports from the United States, a dramatic escalation in the trade war triggered by US President Donald Trump’s sweeping hike in duties on Chinese goods.
The new tariff rate—up from a prior 34%—takes effect from Thursday, April 10, according to a statement from China’s Ministry of Finance. It comes just hours after the US increased its own tariffs on Chinese imports to a cumulative 104%, with Trump later announcing an additional hike to 125%, accusing Beijing of disrespecting the global trading system.
In its statement, the Chinese ministry condemned the US move as “a mistake on top of a mistake,” saying it “seriously infringes on China’s legitimate rights and interests and seriously damages the rules-based multilateral trading system.”
Trade war turns critical
The back-and-forth tariff salvos have sent shockwaves through global markets. The S&P 500 entered bear market territory earlier this week, falling nearly 20% from recent highs, while South Korea’s Kospi and Germany’s DAX each plunged more than 4% on Wednesday. Oil prices sank to four-year lows, with Brent crude falling below US$59 a barrel.
Speaking to Fox Business, US Treasury Secretary Scott Bessent dismissed China’s retaliation as economically self-destructive. “This escalation is a loser for them,” he said, arguing that China exports five times as much to the US as it imports. “They can raise their tariffs. But so what?”
Bessent added that China has “the most imbalanced economy in the history of the modern world” and warned that if Beijing devalues its currency in response, “everyone will have to keep raising their tariffs to offset the devaluation.”
Beijing’s broader response
Alongside the tariff hikes, China:
- Added 12 US firms to its dual-use export control list
- Blacklisted 6 additional American entities under its “unreliable entity” list
- Announced trade restrictions on 18 US companies, primarily in the defence sector
- Filed a second complaint with the World Trade Organization, challenging the legality of the US tariffs
In a statement to the WTO, China warned the situation had “dangerously escalated,” calling the US actions “reckless” and a threat to global economic stability. “While China opposes trade wars, it will firmly defend its legitimate interests,” it said.
Chinese state media struck a similarly defiant tone. An editorial in the China Daily called for “global unity” against what it described as Trump’s “trade tyranny.” Another piece urged the European Union to join China in upholding multilateral free trade principles.
No sign of de-escalation
China’s Foreign Ministry reiterated its refusal to negotiate under pressure. “If the US truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit,” spokesman Lin Jian said on Wednesday.
China’s Ministry of Commerce said Beijing was ready to “fight to the end,” and released a white paper accusing the US of breaking its commitments under the Phase One trade deal. Among other points, the document cited a US law threatening to ban TikTok as evidence of technology coercion—violating a key clause of the prior agreement.
Meanwhile, Trump doubled down, using his Truth Social platform to encourage companies to move to the US to avoid the new tariffs. “This is a GREAT time to move your COMPANY into the United States of America,” he wrote, touting “ZERO TARIFFS” and expedited energy approvals. “Don’t wait, DO IT NOW!”
Trump has not spoken directly with Chinese President Xi Jinping since returning to office in January, and Beijing has shown little appetite for initiating talks.
Pressure on China’s economy mounts
Despite a tone of defiance, Chinese officials acknowledge growing risks to the country’s export-dependent economy. Several logistics companies reported a sharp fall in freight volumes and halted construction projects in Cambodia and Vietnam, where Chinese firms had moved operations to avoid prior tariffs.
“If the tariffs were at 10% or 20%, trade could still go on,” said Wu Changchun, general manager of a Chinese shipping company. “At 104%, that’s full-on decoupling. Trade would basically come to a standstill.”
Businesses like Fuling Global, a supplier of disposable tableware to McDonald’s and Wendy’s, warned that the 84% tariffs could “significantly impact” operations, noting that two-thirds of their revenue came from the US.
To offset the damage, China has begun implementing domestic stimulus measures aimed at boosting internal consumption, but analysts warn that any structural transition will take time.
Global implications
Trump’s global tariff framework—termed the “reciprocal tariff” policy—has imposed varying rates on 57 countries and territories, with 20% on the EU, 26% on India, 49% on Cambodia, and 10% baseline tariffs on traditional allies like Australia and Canada. Only a small number of countries received a temporary 90-day pause, with China explicitly excluded.
The European Union announced its own set of retaliatory measures on Wednesday, slapping 10–25% duties on a €22 billion tranche of US goods, with more expected soon. Brussels reiterated that its countermeasures could be suspended “at any time” if the US returns to a fair negotiating framework.
Speaking from Washington, Treasury Secretary Bessent indicated the US remains open to “tailored trade agreements” with allies. “If they come to the table with solid proposals, I think we can end up with some good deals,” he said.
