China retaliates with 84% tariff on US goods

China has announced it will impose an additional 50% tariff on all American imports, in response to US President Donald Trump’s similar tariff increases on its goods. This raises China’s total tariff on US goods to 84%.

The world’s second-largest economy also pledged to implement new supportive policies in a timely manner to counter external shocks.

Analysts warn that tit-for-tat retaliation and high tariffs risk further decoupling with the US, but noted that Beijing’s move is a clear signal that it will resolutely defend its interests and fight to the end.

US stock index futures fell sharply following China’s announcement of the retaliatory measures.

Trump’s action, which increased the total of additional import taxes since he took office in January to 104%, took effect at noon on Wednesday.

The tax to be implemented by Beijing will take effect at noon on Thursday, raising the total of additional tariffs raised by Beijing to 84%.

“China will resolutely defend its interests, the multilateral trading system, and the international economic order,” the Ministry of Commerce said in a statement online.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management in Hong Kong, said: “China has sent a clear signal that it will maintain its stance on trade policies despite high tariffs in the US.”

In addition to filing a complaint with the World Trade Organization over the US’s new tariffs, the Chinese Ministry of Commerce has added six US companies – Shield AI, Sierra Nevada, Cyberlux, Edge Autonomy Operations, Group W, and Hudson Technologies – to its list of unreliable entities.

It also imposed export controls on 12 American companies, banning Chinese companies from supplying these companies with dual-use items that have both civilian and military applications.

Those facing restrictions are American Photonics, Novotech, Echodyne, Marvin Engineering, Exovera, Teledyne Brown Engineering, BRINC Drones, SYNEXXUS, Firestorm Labs, Kratos Unmanned Aerial Systems, Domo Tactical Communications, and Insitu.

Meanwhile, the Chinese government intervened in capital markets to bolster investor confidence by increasing A-share purchases through its “national team” of state-backed funds.

Premier Li Qiang said at a symposium with economists and entrepreneurs on Wednesday that the Chinese economy had gained good momentum in the first quarter and acknowledged external pressure.

“We have made a full assessment and are preparing for various uncertainties,” Li said, according to state broadcaster CCTV.

Li, China’s number 2 political figure, vowed new measures to stabilize the national economy, while setting his sights on boosting domestic markets.

“We will regard the expansion of domestic demand as a long-term strategy,” he added.

The world’s second-largest economy will release March trade figures and first-quarter GDP next week.

Before announcing its latest retaliation, Beijing released a comprehensive framework on Wednesday reaffirming its stance on trade relations with the US, warning that tariffs will “ultimately backfire,” while leaving the door open for an “equal dialogue” between the countries.