China retaliates with 34% tariffs on all U.S. goods, signaling potential escalation in trade war.

From CNBC: 2025-04-07 04:10:00

Risks of a U.S.-China trade war intensify as Beijing retaliates with 34% tariffs on all U.S. goods, matching Trump’s latest duties. China’s aggressive stance signals potential escalation, with further rounds of tariffs expected. The move could stunt China’s economy by 1.5-2%, prompting a global market rout and sending shares plummeting.

Beijing’s shift to an aggressive stance makes a near-term trade deal unlikely, with Chinese leadership showing diminished hopes for an agreement. Trump criticizes China’s response as panicked, offering to lower tariffs in exchange for TikTok sale approval. Beijing, focused on national dignity, may not comply due to concerns of yielding to bullying.

Eurasia Group analysts suggest Beijing is open to negotiations, using tariff retaliation as a precondition for talks. People’s Daily outlines Beijing’s plans to counter economic fallout, emphasizing policy measures to boost consumption and ease fiscal policies. The diminishing deal prospects exacerbate global market turmoil, with Chinese shares plunging and bond yields dropping.

Read more: China’s counter tariffs raise the specter of an intense trade war with U.S.