The US has hit China with the biggest-ever tariff hike on almost all Chinese products, bringing total levies to at least 54%, a move that could decimate Chinese shipments to the world’s largest economy.
The new 34% tariffs announced by President Donald Trump on Wednesday will add to the 20% tariffs that entered effect earlier this year, hitting most of the half a trillion dollars worth of goods Chinese firms exported to the US in 2024. The new tariffs will go into effect on April 9, he said during an event in the White House Rose Garden.
“Put simply: if Trump’s prior 20% tariff hikes took a hammer to US-China trade, today’s actions are a bazooka,” said Jennifer Welch, chief geoeconomics analyst for Bloomberg Economics.
The latest tariffs bring US levies close to the 60% rate Trump floated on the campaign trail.
Macquarie Group estimated last year that China’s GDP growth could be reduced by 2 percentage points in the event of a 60% tariff rate. A simulation by Bloomberg Economics shows that the trade between the world’s largest economies would shrink to practically nothing with tariffs that high.
The Chinese Ministry of Commerce didn’t immediately respond to a request for comment in the early hours of Thursday.
See also: Fear grips markets as Trump tariffs raise risks to global growth
Beijing has retaliated against previous tariffs with levies on American products. China has also restricted exports of critical minerals and targeted additional US firms for investigation, steps it could take in response to Trump’s latest moves.
“These tariffs will put China under enormous pressure,” said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics in Washington.
“China’s retaliation to the latest two rounds was relatively muted, but today’s action could harden views in Beijing and lead to serious escalation far beyond tariffs,” he added.
See also: Trump tariffs spare no country, many in Asia, Europe hit harder
The new so-called reciprocal tariff will add to a slew of US moves designed to curb the US’ trade deficit with China, including existing tariffs from the first Trump term that were maintained by the Biden administration.
De Minimis tariff exemptions, which currently allow packages worth US$800 or less from China and Hong Kong to enter the US duty-free, will end on May 2, the White House announced Wednesday. The tariff exemptions helped give rise to online marketplaces by Shein and PDD Holdings Inc’s Temu that ship goods directly to US shoppers from Chinese factories.
These actions by the US may prompt Beijing to add stimulus to the domestic economy to try to compensate for the likely hit to demand. China’s economy was already struggling with a supply glut that was pushing down prices. That issue would likely be exacerbated by a decrease in exports because of the tariffs.
What Bloomberg Economics Says ...
If you add today’s announcement of 34% tariffs to the 13% average tariff rate China faced prior to Trump’s return to the White House, and the 20% hike Trump has introduced since January 20, we’re actually looking at a 67% average tariff rate. Trump also signed an executive order today once again eliminating duty-free de minimis treatment for low-value imports from China, which will nudge the average tariff rate higher. - Jennifer Welch, chief geoeconomics analyst
Economists expect that the central bank to reduce the amount of cash banks must keep in reserve this quarter, which will allow them to lend more money to households and companies.
Chinese consumption has shown signs of resilience on a government initiative to subsidize purchases of cars and home appliances. But consumer inflation dropped far more than forecast earlier this year, and expectations for future business in the manufacturing industry weakened for a second month in March to the lowest level in 2025.
Tensions between Washington and Beijing have worsened since Trump returned to the White House in January. The US president has yet to speak with his Chinese counterpart more than two months after his inauguration. They are also locked in a stalemate over China’s alleged role in the flow of fentanyl into America, which Trump cited as a reason for the 20% tariffs imposed earlier this year.
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Fentanyl has become a flashpoint in US-China relations, with Trump accusing Beijing of having done too little to stop its precursors from entering the US. China has in turn blamed the Trump administration for using the issue as a pretext to raise tariffs, with Chinese Foreign Minister describing it as “blackmail” earlier this week.
The economic conflict between the two governments has spilled over to private companies in both countries. Chinese officials have pushed back against Walmart Inc.’s efforts to pressure Chinese suppliers to cut prices to offset Trump’s tariffs. Hong Kong tycoon Li Ka-shing attracted Beijing’s ire by agreeing to sell his company’s ports in Panama to appease Trump.
Trump justified his new tariffs as a fair way to match the barriers that other countries enact on US firms and goods. The new 34% blanket levies are half of what Trump considers to be tariffs China charges to the US, including the effects of other trade barriers and alleged currency manipulation.
The Trump administration has accused China of erecting non-tariff barriers that disadvantage US exports and companies, complaints that were laid out in an annual report published by the USTR this week.
