China Hits Back With 34% Tariff on U.S. Goods, Blacklists Defense Firms
By Kelsey Cheng
China said Friday it would impose a 34% tariff on all U.S. imports, part of a retaliatory package against President Donald Trump’s “reciprocal tariffs,” as the trade war between the world’s two largest economies heightens.
The new levy will take effect on April 10, according to a statement by the Customs Tariff Commission of the State Council. It matches the 34% hike on Chinese goods announced by the U.S. on Wednesday. The latest tariff, set to begin April 9, is in addition to the 20% already implemented by Trump since his return to office in January.
The move by the U.S. “violates international trade rules, seriously undermines China’s legitimate rights and interests, and constitutes a typical act of unilateral bullying,” the commission’s statement said.
The U.S. was China’s fourth-largest source of imports in 2024, trailing the European Union, Taiwan and South Korea, according to Chinese customs data. Imports from the U.S. totaled $163.62 billion, with top categories including grains, oilseeds, minerals, chemical products, machinery, and medical and optical instruments.
Friday’s tariff hike follows an earlier round of retaliatory duties announced by Beijing in March. They included a 15% tariff on U.S.-origin chicken, wheat, corn, and cotton, and a 10% tariff on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products.
Additionally, China’s Ministry of Commerce on Friday added 16 U.S. entities to its export control list, barring the export of dual-use items — those with civilian and military applications — to the firms. Among the new names on the list are aerospace and defense companies Sierra Nevada Corp. and High Point Aerotechnologies, as well as logistics firm Universal Logistics Holdings Inc.
The ministry also added 11 others into its unreliable entity list, which prohibits them from engaging in China-related import or export activities, and from making new investments within China. The additions include drone manufacturer Skydio Inc. and Boeing subsidiary Insitu Inc.
The commerce ministry and the General Administration of Customs also announced import restrictions on more rare-earth products, effective immediately. The seven types of restricted materials — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — are key for defense and clean energy technologies.
In February, China added five metals — tungsten, tellurium, bismuth, molybdenum and indium — used in the semiconductor and defense industries to its export control list. To ship certain items related to these metals abroad, exporters have to apply for special licenses from the commerce ministry.
“While the objectives may differ, the U.S. and China have just passed the Rubicon of further mutual decoupling,” said Gary Ng, senior economist at Natixis.
“For Beijing, it is an act to increase the bargaining chips for negotiation, but the structural disagreement will make it more challenging to reach a deal with the U.S. than other countries,” he said Friday.
Beijing also launched an investigation into medical CT X-ray tubes imported from the U.S. and India, and suspended poultry imports from two American companies, Mountaire Farms of Delaware Inc. and Coastal Processing LLC.
China’s response followed Trump’s Wednesday announcement of “reciprocal tariffs” ranging from 10% to 49% on dozens of U.S. trading partners, which sent shockwaves through capital markets and are expected to cause major disruption to global supply chains.
Researchers at Morgan Stanley and Nomura Holdings Inc. estimate that, when factoring in previous tariffs, the average U.S. tariff on Chinese goods could rise to as high as 66%.
The extra levy is likely to hit Chinese exporters hard. In 2024, China exported $524.66 billion worth of goods to the U.S., accounting for 14.7% of the Asian nation’s total exports. Key categories include electronics, base metals such as steel and aluminum, and a wide swath of labor-intensive goods such as textiles, plastics, apparel, toys and furniture.
But external demand is a fragile support for Chinese exporters. The pressure of Trump’s initial 20% tariffs, implemented in two 10% hikes, is already visible in trade data, with exports to the U.S. of a variety of Chinese goods, including garments, furniture, footwear and toys, in the first two months of the year down between 7% and 18.3% by value, customs data showed.
Feng Yiming contributed to this story.
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and Jonathan Breen (jonathanbreen@caixin.com)
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