China announced sweeping retaliatory measures Friday, imposing a 34% tariff on all U.S. imports and unveiling broad export restrictions targeting rare earth elements and American companies. The move comes just two days after President Donald Trump escalated the trade war by increasing total tariffs on Chinese goods to 54%, the highest among any major U.S. trading partner.
The new Chinese levies will take effect April 10, covering the full spectrum of U.S. exports to the country. Beijing's Ministry of Finance described the action as a necessary response to what it called "a typical unilateral bullying practice" by the United States. "This practice of the U.S. is not in line with international trade rules, undermines China's legitimate rights and interests," the ministry said in a statement.
In addition to tariffs, China is halting exports of several rare earth elements crucial to American technology and defense industries, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, effective April 4. The Commerce Ministry stated the export controls are intended "to better safeguard national security and interests, and to fulfill international obligations such as non-proliferation."
The Chinese government also added 16 American entities to its export control list and labeled another 11 companies as "unreliable entities." Among the targeted firms are U.S.-based drone manufacturers Skydio Inc. and BRINC Drones, which Beijing accused of "undermining China's national sovereignty" due to arms sales to Taiwan. These firms are now banned from making new investments or conducting import and export activities in China.
- New Chinese Trade Measures Include:
- 34% reciprocal tariffs on all U.S. goods (effective April 10)
- Export controls on rare earth minerals
- 16 U.S. companies placed on export control list
- 11 U.S. companies added to "unreliable entities" list
- Anti-dumping probe on U.S. and Indian medical CT tubes
The retaliation arrives amid rising tensions between Washington and Beijing and follows Trump's latest round of tariff hikes, unveiled during a Rose Garden ceremony Wednesday. The President characterized the move as a "declaration of economic independence," arguing the measures are vital to reversing decades of unfair trade practices that he says have gutted U.S. manufacturing.
Trump's tariff policy has attracted strong criticism from economic analysts and global leaders alike. Fitch Ratings warned the combined 54% U.S. import tariffs and retaliatory measures could "tip economies into recession" through job losses and rising consumer prices. "For now, companies are rushing to assess where they are most affected, and we may start seeing price increases within a few weeks as current inventory runs out," said Tony Pelli of business consultancy BSI.
China's Friday announcement coincided with a major public holiday, amplifying its domestic resonance. Officials also launched a new anti-dumping investigation into imports of CT X-ray tubes from the U.S. and India, intensifying scrutiny on American medical devices.
The financial fallout was immediate. Dow futures dropped more than 1,000 points, or 2.3%, following China's announcement. The S&P 500 was down 2.4%, while the Nasdaq Composite fell 2.7%. European and UK markets also plunged more than 3%, their worst single-day decline in years. On Thursday, U.S. markets had already braced for disruption, with the Dow falling over 1,600 points and the Nasdaq posting its sharpest drop since the pandemic era.
