China announces 34% tariffs on imports from US as Trump’s tariffs, reciprocal levies create turmoil in financial markets
China has hit back at the United States with an additional tariff of 34 percent on all US imports, starting Thursday, April 10.
The finance ministry announced China’s fresh measure on Friday. This comes after US President Donald Trump ordered what he calls a reciprocal tariff of 34 percent on Chinese goods.
The ministry said it strongly urges the US to immediately withdraw unilateral tariffs and resolve differences in trade through talks.
The commerce ministry said Beijing has filed a complaint with the World Trade Organization, saying Trump’s reciprocal tariffs gravely violate WTO rules.
It also announced tougher regulations on exports of rare earths.
Earlier, China took countermeasures in February and March in response to the Trump administration’s imposition of additional duties.
Already, Trump’s tariff announcement has sent global financial markets into freefall and weakened the dollar.
Shares in Tokyo plummeted on Friday after Wall Street indices suffered their biggest one-day losses since the COVID pandemic in 2020.
The benchmark Nikkei 225 briefly plunged by over 1,400 points, or more than 4 percent.
The index ended sharply lower for the second straight day, closing the week at 33,780, down 955 points or 2.75 percent. The benchmark finished below the 34,000 marks for the first time in about eight months.
In Washington, a senior administration official warned the countries targeted by reciprocal tariffs not to take retaliatory measures.
That comment poured more fuel on investor fears of an impending trade war. They dumped stocks across the board, worried about damage to the global economy.
The dollar also fell sharply against the yen in New York on Thursday. It weakened to the lower 145 level for the first time in about six months. The Japanese currency maintained that level in Tokyo on Friday.
Investors fear that the tariffs could drive the US economy into a recession. That’s causing US long-term interest rates to drop and making dollar assets less attractive.
Recently, the Office of the United States Trade Representative, released a document including a formula for the tariff. It shows that the rate was calculated based on trade deficit and import values, which does not match the explanation given by the White House.
The latest development comes after Trump announced on Wednesday that the US will impose a baseline levy of 10 percent on all countries. It will also institute reciprocal tariffs on nearly 60 countries and regions with a 24 percent levy.
The USTR shows that to calculate the effective rates, it uses import and export data from the US Census Bureau for 2024, and divides the trade deficit by import values that the US has with a particular country or region.