^{Source: ACA Business Club}

In a dramatic escalation of the ongoing trade war, China's Ministry of Finance announced on Friday that it will impose a 34% tariff on all U.S. imports starting April 10. This retaliatory move follows the latest wave of U.S. tariffs imposed by President Donald Trump's administration earlier this week.

China Demands U.S. Reconsider Tariff Hike

Beijing has urged Washington to immediately retract its unilateral tariff measures, advocating for an approach based on equal negotiation, mutual respect, and fair trade practices. According to a translated statement from China’s finance ministry, the newly imposed U.S. duties—totaling 54% when combined with previous rounds—violate international trade norms and could severely disrupt global economic growth and supply chains.

U.S. Companies Targeted: China Expands Trade Blacklist

As part of its countermeasures, China has also added 11 major U.S. firms to its "unreliable entities list," citing violations of market principles and contractual obligations. Additionally, 16 U.S. entities have been placed under strict export controls, affecting key industries reliant on Chinese raw materials and rare-earth elements. Among the restricted materials are samarium, gadolinium, and terbium, essential for high-tech manufacturing and military applications.

Global Markets React: Stocks Plummet Amid Trade Tensions

The announcement sent shockwaves through global financial markets, exacerbating fears of an economic slowdown. U.S. stock futures took a sharp dive, with Dow Jones Industrial Average futures dropping 900 points (-2.2%), while S&P 500 and Nasdaq-100 futures fell 2.3% and 2.6%, respectively.

Across the Atlantic, European markets were also hit hard, with the Stoxx 600 index plummeting 4.5% by mid-morning trading in London. Banking stocks suffered a particularly heavy blow, losing over 9.5% in response to the escalating tensions.

Trade Relationship at Stake: A $582 Billion Battle

The U.S.-China trade relationship, valued at $582.4 billion in goods in 2024, now faces severe disruptions as both nations continue to impose aggressive tariffs. Beijing has signaled that it will diversify its trade partnerships in response, potentially deepening economic ties with the European Union, Southeast Asia, and Latin America.

Economic Fallout: China Eyes Stimulus Amid Growth Concerns

With China already grappling with a property crisis and weakened consumer confidence post-pandemic, the government is expected to roll out further economic stimulus measures to cushion the impact of these new trade restrictions. Analysts believe Beijing may increase domestic infrastructure spending and enhance trade deals with alternative markets to mitigate U.S. pressure.

What's Next?

While the European Union has yet to announce its response, officials have indicated a preparedness to retaliate if needed. Meanwhile, industry experts warn that continued tariff escalations could trigger long-term supply chain disruptions, increasing costs for businesses and consumers alike.

The White House has yet to officially respond to China’s latest move, but with global markets on edge and businesses facing uncertainty, the trade war’s next chapter is set to unfold in the coming weeks.

‍