The tariff escalation, announced by White House Press Secretary Leavitt, throws global markets into deeper uncertainty as the world’s two largest economies harden their lines.
The U.S. has reportedly lit a new fuse in its escalating trade standoff with China—slapping a steep 104% additional tariff on select Chinese imports in a move that could rattle global markets.
The White House says the action is a direct response to Beijing’s refusal to lift retaliatory measures. Collections begin April 9, with the announcement delivered during a press briefing on April 8.
“The 104% additional tariff will be collected starting tomorrow, April 9,” a spokesperson confirmed, according to Fox Business reporter Edward Lawrence.
The reaction from Beijing is expected to be swift and strategic. China may allow the yuan to depreciate, making its exports cheaper and more competitive. Export controls could tighten further, especially on rare earth elements—critical to U.S. tech and defense industries—already subject to restrictions.
On the trade front, Beijing has already slapped a 34% tariff on all U.S. goods, halted imports of certain American agricultural products, and may expand those bans. Meanwhile, China is actively diversifying its trade portfolio, strengthening ties with the European Union and other regions to reduce its reliance on the U.S. market.
Diplomatically, the divide is widening. With former President Trump threatening to walk away from negotiations, Beijing could officially exit talks and shift focus toward building global alliances that dilute U.S. influence in trade and tech.
Domestically, China is expected to double down on boosting internal consumption and accelerating its push for technological self-reliance. But the economic shockwaves won’t stop at the Chinese border.
In 2024, the U.S. imported $438 billion in Chinese goods and exported $143 billion—leaving a $295 billion trade deficit, according to the U.S. Trade Representative. Replacing Chinese supply chains will be a monumental challenge.
“Taxes on physical goods aside, both countries are economically intertwined in a lot of ways,” said Deborah Elms, Head of Trade Policy at the Hinrich Foundation, in a BBC report. “You can only tariff so much for so long… there are many ways in which it can get worse.”
With Chinese goods likely to be redirected to Southeast Asia and beyond, ripple effects could destabilize fragile trade balances elsewhere. “We are in a very different universe, one that is really murky,” Elms warned.
Unlike the 2018-19 trade war, this round lacks clear objectives. “It’s unclear what is motivating these tariffs,” said Roland Rajah, lead economist at the Lowy Institute. “There’s retaliation to save face and there’s pulling out the whole arsenal. It’s not clear if China wants to go down that path. It just might.”
Trump and Xi haven’t spoken since the announcement. While Beijing says it remains open to dialogue, no formal overtures have been made.
“I think the U.S. is overplaying its hand,” Elms added. “How will this end? No one knows.
