China and US tariff war explained as Trump threatens 104% rates
China is in an intense stand-off over trade with the US after the president threatened to inflict an eye-watering combined tariff of 104 percent on Chinese goods.
The US president managed to agitate global stock markets and sour relationships with the country's historic trading partners, all in a day's work last week.
Donald Trump announced his vision to inflict 'reciprocal tariffs' on foreign goods from around the globe, whether 'friend or foe', on April 2.
While many have been hit with a baseline 10 percent tariff, dozens of countries are bracing for higher taxes as of Wednesday (April 9) in a move Trump hopes will boost the economy, jobs and domestic industries.
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In his 'Liberation Day' speech, Trump said the second lot of tariffs would apply to the 'worst offenders' and specifically picked on the European Union and China, describing them as the biggest culprits who 'rip us off' the most.
"This is Liberation Day," the POTUS said from the Rose Garden. "We've been waiting for a long time, April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to 'Make America Wealthy Again'.
"For decades our country has been looted, pillaged, raped and plundered from nations, near and far, from both friend and foe alike."
Now that China has vowed to 'fight to the end' in the bitter US trade war, here's everything you need to know about the spat so far.
What tariffs did Trump announce on China?
The US initially launched a trade war with China all the way back during Trump's first term, and Joe Biden simply preserved the tariffs during his presidency.
The spat has been simmering away ever since, and has now reached boiling point with Trump back in office to continue his assault on Chinese imports.
Within days of returning to the White House, he took aim at China, Mexico and Canada, accusing them of facilitating illegal immigration and drugs into the States.
A 10 percent tariff was then applied to all Chinese imports to the US on February 4.
This provoked China to strike back, applying 15 percent tariffs on coal and liquefied natural gas plus a 10 percent levy on crude oil, agricultural machinery and large-engine cars from the US as of February 10.
Then on March 4, Trump doubled the tariff on all Chinese imports to 20 percent.
Continuing the to-and-fro momentum, China retaliated by announcing tariffs of up to 15 percent on US farm products, like chicken, pork, soybeans and beef.
The POTUS then threatened to inflict a 25 percent tariff on all imports from countries that buy oil or gas from Venezuela, where China stands as the country's biggest buyer, purchasing 68 percent of its oil in 2023, reports PBS.
On April 2, Trump then confirmed the US will charge a 34 percent tax on imports from China on top of the existing 20 percent, presenting a 54 percent hike in total.
How did China respond?
As expected, China isn't best pleased with the move.
Beijing declared in less than 72 hours that it would impose a 34 percent tariff on US products as of April 10 to match Trump's tariffs.
In response, Trump said China would have another 50 percent tax applied as of April 9 - bringing the tariffs to a combined total of 104 percent - if the country refuses to remove the levy.
China's Commerce Ministry has accused the US of 'blackmail' and 'bullying' and hinted more counter-tariffs could be on the way for American goods in the stand-off with Trump.
The ministry said: “The US threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US.
“China will never accept this. If the US insists on its own way, China will fight to the end.”
The nation has also filed a lawsuit with the World Trade Organization (WTO), stating Trump's tariffs 'seriously violates WTO rules'.
Why Trump didn't like China's reaction
Trump has called China the 'biggest abuser of them all' when it came to trading practices - and isn't showing any signs of bowing out of the battle.
Taking to his Truth Social platform, he said China's tariffs are harming the US.
"Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place," Trump wrote.
"This is despite the fact that the biggest abuser of them all, China, whose markets are crashing, just raised its Tariffs by 34 percent, on top of its long term ridiculously high Tariffs (Plus!), not acknowledging my warning for abusing countries not to retaliate."
What happens next?
Well, if China doesn't reconsider its reciprocal tariff and Trump is serious about bringing in a combined total of 104 percent levy on Chinese goods, it's expected China will probably retaliate. And so on, until some sort of agreement is reached or at least a pause to negotiate is made.
Meanwhile, financiers warn global stock markets will continue to yo-yo amid the turmoil while many US investors, including billionaire and Trump-ally, Bill Ackman, call for calm and a 'timeout' to mitigate risks.
Topics: China, Donald Trump, Money, Politics, US News, World News, Tariffs
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