China has announced a slew of countermeasures against tariffs imposed by United States President Donald Trump, including additional tariffs of 34 percent on all goods and curbs on the export of some rare earths, deepening an escalating trade war.
Trump on Wednesday announced that China would be hit with a 34-percent tariff, on top of the 20 percent he imposed earlier this year, bringing the total new levies to 54 percent.
On Friday, China’s Ministry of Finance said the additional tariffs would be imposed from April 10. Beijing has previously imposed tariffs of 15 percent on imports of coal and liquefied natural gas (LNG) from the US in retaliation for Washington’s 10 percent levies on Chinese goods.
It also announced stiff export controls on key minerals and businesses, limiting what could be exchanged with the US.
“The purpose of the Chinese government’s implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfil international obligations such as non-proliferation,” the Ministry of Commerce said in a statement.
On Friday morning, Trump responded to the slate of retaliatory measures with a fiery social-media post written in all capital letters.
“CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” Trump wrote on Truth Social.
Complaint with WTO
But China has pushed forward with countering Trump’s aggressive trade policies, saying it had opened a formal complaint against the new US tariffs with the World Trade Organization (WTO) on Friday.
As part of its complaint, Beijing argued the measures violate WTO rules and requesting consultations.
“China has filed the WTO complaint with respect to the United States’ measures,” the Permanent Mission of China to the World Trade Organization said in a statement.
Beijing also imposed sweeping export controls to limit the exchange of goods and services with the US. Some pertained to the export of medium and heavy rare earths to the US, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, effective from April 4.
Others took aim at US businesses. China added 16 US entities to its export control list, which bans the export of dual-use items to affected firms.
Another 11 US firms were included on the “unreliable entities” list, which allows Beijing to take punitive action against foreign entities. The targeted firms includes Skydio Inc and BRINC Drones over arms sales to democratically governed Taiwan, which China claims as part of its territory.
The Chinese Commerce Ministry said the targeted companies seriously “undermined” China’s national sovereignty, security and development interests and would be banned from new investments, import and export activities in China.
Agriculture trade took a hit as well, as Chinese customs imposed an immediate suspension on imports of sorghums from grain exporter C&D (USA) Inc, as well as poultry and bonemeal from three US firms.
Then there were the threats of further regulatory action. Beijing announced it had launched an anti-dumping probe, looking into imports of certain medical CT tubes from the US and India.
It also said it would pursue a wider investigation into how the medical industry’s competitiveness was affected by imports of medical CT tubes.
How the economy is reacting
US stock futures fell sharply on Friday, signalling more losses on Wall Street, as the Trump administration’s sweeping levies knocked $2.4 trillion from US equities.
Shares of Big Tech stocks fell in premarket trading, with companies such as Apple and Nvidia having big exposure to China and Taiwan for manufacturing their products.
In Japan, a top US trading partner, Prime Minister Shigeru Ishiba said the tariffs had created a “national crisis”, as a plunge in banking shares on Friday set Tokyo’s stock market on course for its worst week in years. European shares were also headed for the biggest weekly loss in three years.
But US Secretary of State Marco Rubio on Friday disputed any economic crash, telling reporters that markets were reacting to the change and would adjust.
“Their economies are not crashing. Their markets are reacting to a dramatic change in the global order in terms of trade,” he said at a media conference in Brussels. “The markets will adjust.”
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