China retaliates with 84% tariffs on U.S. products amid escalating trade war

• China imposes an 84% tariff on U.S. imports, following President Trump's 104% tariff on Chinese goods
• Trump threatens further tariff hikes, while China calls for global unity against what it terms U.S. "trade tyranny”
• Experts warn that these tariffs could lead to a "decoupling" of U.S.-China trade, with uncertain consequences for both economies

In a dramatic escalation of the ongoing trade war, China has announced it will impose an 84% tariff on U.S. imports, up from 34%. 

The new levies are set to take effect on Thursday, April 10, following a series of similar actions by the United States. 

The move comes hours after the U.S. President Donald Trump imposed a massive 104% tariff on Chinese goods, later escalating to 125%. 

Trump's tariffs target dozens of trading partners, with China being one of the hardest hit.

The Chinese Ministry of Finance denounced the U.S. actions, calling them a violation of multilateral trade rules and a direct infringement on China's legitimate interests. 

The ministry warned that these tariff hikes would have severe consequences for both economies, escalating the situation even further. 

"The tariff escalation against China by the United States simply piles mistakes on top of mistakes.

"It severely infringes on China’s legitimate rights and interests," the statement read. 

In retaliation, China has also blacklisted six U.S. artificial intelligence firms, including Shield AI Inc. and Sierra Nevada Corp., accusing them of selling arms to Taiwan and engaging in military collaborations with the island, which China considers a breakaway province.

The situation has sparked fears of global economic instability. 

U.S. tariffs have already had a significant impact, not only on China but also on countries around the world. 

Following the imposition of Trump's latest levies, European stock markets took a hit, with the FTSE 100 and Germany’s DAX falling sharply.

President Trump responded to China’s retaliatory measures by announcing an additional 21% rise in tariffs, blaming China for a lack of respect towards the U.S. 

He further threatened to raise tariffs even higher in the future unless China changes its policies. 

Trump’s administration has maintained that these tariff hikes are necessary to counter China's trade practices, which the U.S. government claims have been harmful to American workers and businesses.

Beijing, for its part, has consistently condemned the U.S. actions, framing them as trade tyranny. 

The state-run China Daily published an editorial calling for global unity against Trump’s "hegemonic and bullying" approach to trade. 

Beijing also urged the European Union to collaborate with China to uphold free trade and multilateralism, noting ongoing partnerships with Japan, South Korea, and other Asian economies.

However, the tariffs come at a challenging time for China’s economy. 

With domestic consumption weak and exports under pressure, businesses in China are feeling the strain. 

Companies that rely heavily on exports to the U.S., like Fuling, which supplies disposable tableware to fast food chains, have already reported significant losses. 

Fuling’s revenue from the U.S. accounted for nearly two-thirds of its earnings in 2023 and the first half of 2024. 

As a result, the company has been forced to move some of its operations to Indonesia in an attempt to mitigate the impact of tariffs. 

However, this move has not shielded it from further tariff hikes, as U.S. tariffs now also apply to Chinese goods exported from Indonesia.

Economists have warned that the broader impact of these tariffs could push both the U.S. and global economies into a recession. 

While Chinese businesses have been adjusting their supply chains and looking for new markets, the unpredictability of the situation has made it difficult to plan. 

Higher tariffs are forcing companies to absorb additional costs, which are eroding profit margins. 

As Dan Wang from the Eurasia Group consultancy explained, "Any tariff upwards of 35% will wipe out all the profits that Chinese businesses make when exporting to the U.S. or Southeast Asia."

In light of these challenges, some analysts suggest that the tariffs will force China to restructure its economy by relying more heavily on domestic consumption. 

However, this strategy has proven difficult, and it remains unclear whether it will be sustainable in the long run. 

As Tim Waterer from KCM Trade noted, the tariffs are designed to suppress China’s economic growth, and the country’s ability to adjust will be crucial in determining its future.

As tensions between the two largest economies continue to rise, the possibility of a full decoupling of trade between the U.S. and China grows more likely. 

Companies in both nations are already grappling with the fallout from these tariffs, with freight companies reporting declines in business and some construction projects in Southeast Asia grinding to a halt.

Despite the escalating tariffs, China has left the door open for negotiations. 

However, President Trump has not engaged with Chinese President Xi Jinping since his return to the White House, and the prospects for a peaceful resolution remain uncertain.

The American Chamber of Commerce in China has expressed concern over the long-term impact of the trade war, warning that the upheaval caused by the tariffs could harm both consumers and businesses. 

"This level of upheaval is unprecedented, and it remains unclear how the current measures will benefit consumers in either nation or the broader economy," the organisation stated.

Nigeria considers review of N54.99 trn budget amid US tariff dispute

Meanwhile, TheRadar earlier reported that the Nigerian government indicated that it may review its 2025 budget of N54.99 trillion in response to recent tariff actions by the President of the United States, Donald Trump, which have caused turmoil in global trade.

According to Wale Edun, Nigeria's Minister of Finance, the country’s economic management team, which includes key stakeholders from both the public and private sectors, will assess the evolving situation and propose strategies to mitigate the risks and adapt to the new global trade environment caused by Trump’s tariff policies.