China hits back at Trump tariff hike, raises duties on US goods

Yahoo

10-04-2025

By Joe Cash, Yukun Zhang and Ethan Wang
BEIJING (Reuters) - China hit back at U.S. President Donald Trump singling out the world's second-largest economy for tariffs of more than 100% by raising additional duties on American products to 84% on Wednesday, deepening the trade war between the two superpowers.
Beijing also imposed restrictions on 18 U.S. companies, mostly in defence-related industries, adding to the 60 or so American firms punished over Trump's tariffs.
The move comes after Trump made good on his threat to impose an additional 50% tariff on China unless it withdrew its retaliatory levies on the United States, taking total new U.S. duties on Chinese goods this year to 104%.
Beijing announced in response it would also raise its levies on U.S. goods by 50%, adding to the 34% increase previously announced and due to be implemented on Thursday.
"The U.S. escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes of China's legitimate rights and interests and seriously undermines the rules-based multilateral trading system," China's finance ministry said in a statement.
Trump has imposed "reciprocal" tariffs on dozens of economies he accuses of "ripping off" the U.S. by selling goods into the world's largest consumer economy while maintaining trade barriers that inhibit U.S. firms' market access.
But he has singled out China for the most punishing taxes, setting the stage for a standoff between the world's top two economies.
In signs that bilateral ties could deteriorate further, China's culture and tourism ministry late on Wednesday issued a travel advisory for citizens visiting the U.S., citing recent "deterioration" of economic and trade relations.
Shortly after, the Ministry of Education followed with an alert for students considering studying in the U.S. state of Ohio, saying that a recent state education bill contained "negative" China-related provisions.
Travel and education are among the top U.S. services exports to China.
TRADE SURPLUS 'INEVITABLE'
Earlier on Wednesday, China released a white paper on U.S.-China commercial ties in which it said Beijing did not deliberately pursue a trade surplus.
"The trade imbalance in goods between China and the U.S. is both an inevitable result of structural issues in the U.S. economy and a consequence of the comparative advantages and international division of labour between the two countries," the report said.
China's trade surplus with the U.S. widened to $295.4 billion last year from $279.1 billion in 2023, according to U.S. Census data. The goods trade gap peaked in 2018 at $418 billion, the same year Trump, in his first term as president, imposed tariffs on Chinese outbound shipments.
The first U.S.-China trade war concluded with Beijing agreeing to a "Phase 1" trade deal with Washington in 2020 in which it agreed to increase purchases of U.S. exports by $200 billion over a two-year period.
Beijing failed to meet its targets when the COVID-19 pandemic struck, but said in its white paper that it had "scrupulously fulfilled its obligations" by taking steps to boost its purchases of U.S. goods and accused Washington of having reneged on the deal.
"The U.S. has systematically escalated economic and other forms of pressure against China, the report said. "Concurrently, the U.S. has promoted false narratives related to human rights, Hong Kong, Taiwan, Xinjiang and the pandemic."
China also talked up its efforts to boost its trade in services with the U.S., economic activity that the Trump administration has not factored into its "reciprocal" duties.
WAR OF ATTRITION
China is bracing for an economic war of attrition as it tries to court other markets in Asia, Europe and the world. But other countries have much smaller markets than America and are also taking a hit from the tariffs.
During Trump's first term, China frustrated U.S. financial and professional services firms by holding up licence applications and carrying out office raids.
But Beijing cannot dip into the same playbook this time as it is trying to attract fresh foreign investment to bolster its economic recovery.
Still, Chinese policymakers are backing themselves to go toe-to-toe with the Trump administration a second time.
"If the U.S. insists on escalating trade restrictions, China has both the determination and the means to respond forcefully - and will do so," a commerce ministry spokesperson said in a statement accompanying the white paper's launch.
"There are no winners in a trade war. China does not want one, but the government will never allow the legitimate rights and interests of the Chinese people to be harmed or taken away."
Ordinary Chinese people have started to voice their concern.
"The situation has already reached a blatant financial and trade war on the global stage," said Ling Wanhua, a 20-year-old Shanghai resident. "It's already hard for college graduates to find jobs. If the overall environment gets worse, the employment situation for graduates will be even worse."
As worries mount, China began censoring some tariff-related content online, with hashtags and searches for "tariff" or "104" mostly blocked on social media platform Weibo.
Reuters reported China's top leaders planned to convene a meeting as early as Wednesday to discuss measures to boost the economy and stabilise the capital markets.
"I think the 104% tariffs are kind of exaggerated," said Wu Lina, a 68-year-old tourist holidaying in Shanghai. "This president, the way this country treats China, oh my God, it will definitely cause some harm."