Beijing/Washington — The global trade war between the world’s two largest economies has dramatically escalated, with China announcing an 84% tariff on all US imports, effective Thursday.
The move follows US President Donald Trump’s decision earlier today to impose a 104% tariff on goods imported from China.
Beijing, accusing the White House of "bullying practices," raised its levy from an existing 34%, in a move that analysts warn could unleash further economic turbulence and drive up global prices.
"This is a clear blow to every US company looking to sell into the Chinese market," said one Beijing-based trade analyst. “With further countermeasures expected, this signals a new phase of entrenched hostilities.”
The Chinese Ministry of Finance confirmed the hike late Tuesday, adding that six US companies—spanning aerospace and artificial intelligence sectors—have now been added to China’s "unreliable entities list."
Among them is the Sierra Nevada Corporation, known for its defense and space contracts. Previously, China blacklisted PVH, parent company of Calvin Klein and Tommy Hilfiger.
President Trump responded swiftly to Beijing’s retaliatory measures, using his Truth Social platform to encourage businesses to relocate.
“This is a GREAT time to move your COMPANY into the United States of America,” he wrote. “ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!”
He later claimed that several countries affected by the new US tariffs are “calling up and kissing my ass” in an attempt to negotiate exemptions.
Timeline of Escalation
-
February 2025: Trump raised tariffs on Chinese goods by 10%, prompting a formal complaint from Beijing to the World Trade Organization.
-
Today: The White House implemented a steep 104% tariff on Chinese imports and broader trade penalties on 60 other countries, which Trump labeled the "worst offenders."
-
Hours later: China retaliated with an 84% tariff on all US imports and expanded its list of blacklisted American firms.
Market Reaction
Markets have responded nervously to the growing tensions. European indices slid further following China’s announcement, and investors have begun dumping long-term US Treasury bonds — traditionally viewed as safe-haven assets — amid fears of prolonged uncertainty.
The tariff war has also drawn reactions from other global powers. Russia, while spared from the list of over 60 countries affected by the US hikes, sharply criticized Washington’s approach.
“Washington doesn’t seem itself bound by the norms of international trade law,” said Russian Foreign Ministry spokesperson Maria Zakharova, accusing the US of violating fundamental WTO principles.
Moscow, she added, is now looking to bolster trade ties with China to cushion potential blowback.
Meanwhile, state-controlled Chinese media has taken to ridiculing countries that have reportedly gone “begging” to Washington for tariff relief, arguing such moves play directly into Trump’s hands.
Beijing, in contrast, says it continues to support a multilateral, rules-based trading system, a position that has reportedly found sympathy among Southeast Asian nations like Thailand, Cambodia, and Vietnam, which have also been hit by US trade actions.
What's Next?
Trade experts warn that with no side backing down, further retaliatory steps could be on the horizon.
Some suggest the conflict could spill over into other domains such as technology, finance, or geopolitics.
“Both sides are digging in,” said a senior analyst at the International Trade Policy Institute. “We’re not just looking at a tariff war anymore — this is becoming a full-spectrum economic confrontation.”