April 6, 2025 | China Retaliates with Tariffs and Trade Restrictions

China imposed a 34% retaliatory tariff on all US goods that will go into effect on April 10. Nations everywhere are beginning to impose their own penalties on US goods. April 2, “Liberation Day,” may well be remembered as the beginning of the end for Trump’s legacy.
Trump hit China with a 34% tariff in addition to the 20% levy implemented earlier in the year, marking up all Chinese exports by 54%. China is not taking matter lightly, and in addition to tariffs, has added 16 US entities to its export control list. Dual-use items from these companies will be prohibited from entering China. Another 11 US agencies were added to the “unreliable entities” list, which the commerce ministry believe “undermined” China’s national security and sovereignty.
The Ukraine mineral deal will become more important now that China as placed controls on exporting an array of rare earth minerals that are crucial for manufacturing. Autos, batteries, smartphones, military defense, and countless other industries will take a blow from these new restrictions.
China has also issued a formal complaint with the World Trade Organization, declaring that the US has violated global trade rules and unfairly punished China. The WTO has 60 days to resolve the matter, and if no progress occurs, China may request adjudication by the Dispute Settlement Body. China has called these “retaliatory” tariffs “unilateral bullying” and pleaded for Washington to drop the levies.
“The US practice is inconsistent with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice that not only undermines the interests of the United States itself, but also endangers global economic development and the stability of the production and supply chain,” the state council tariff commission stated.
The US exported $143.5 billion in goods to China in 2024, a 2.9% decrease from the year prior. Imports from China in 2024 totaled $438.9 billion, a 2.8% increase from 2023. American companies heavily rely on Chinese imports. The effects of these tariffs will prove utterly disastrous in the coming months when we will feel the full impact of the so-called “liberation.”
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Martin Armstrong April 6th, 2025
Posted In: Armstrong Economics