China Hikes Tariffs to 84% in Escalating US-China Trade War

China has stepped up its response in the trade war with the U.S., announcing a sharp increase in tariffs on American goods. Starting Thursday, April 10, 2025, tariffs will jump to 84%, up from the previous rate of 34%, according to the Ministry of Finance of the People’s Republic of China.

In addition to the tariff hike, China has added 12 American companies to its export control list, blocking the export of certain products to them. Six more firms—including Shield AI and Sierra Nevada Corporation—were labeled “unreliable” and are now banned from investing in or doing business within China.

These moves mark a serious escalation in U.S.-China tensions and could have wide-reaching effects on global markets. U.S. stock futures fell sharply after the announcement, signaling growing investor concern.

China Slams U.S. at WTO

In a statement to the World Trade Organization, China said the situation has “dangerously escalated” and expressed “grave concern and firm opposition to this reckless move,” Reuters reported.

China’s State Council Tariff Commission called the U.S. actions “unilateralism” and “economic bullying,” accusing Washington of disregarding international trade norms.

At a WTO trade meeting, China criticized the U.S. for using reciprocal tariffs, saying it violates global trade rules and undermines the multilateral trading system. Chinese officials warned that such measures would ultimately harm the U.S. more than help it.

Trump’s Tariff Surge Sparks Economic Worries

President Trump has raised tariffs on Chinese imports by a massive 104% this year, escalating the trade war further. While the move is aimed at pressuring China, Beijing warned it has both the “determination and means” to push back if Washington continues its aggressive approach.

To protect its currency, China’s central bank has instructed state-owned banks to reduce U.S. dollar purchases, aiming to prevent a sharp decline in the Yuan. The directive follows Trump’s recent tariff announcements and signals Beijing’s intent to maintain financial stability amid the trade dispute.

Market Shock: Stocks Slide, Dollar Weakens

Financial markets reacted immediately. Since the latest tariff hike, the S&P 500 has suffered its steepest drop since the 1950s and is now nearing bear market territory—down nearly 20% from its recent peak.

Even safe-haven assets like U.S. Treasuries are being sold off, and the dollar is losing ground. European markets have also taken a hit, while U.S. futures suggest more losses are likely following a volatile day in Asia.

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Trump Not Too Worried

Despite the economic fallout, President Trump appeared unfazed. In his first response to China’s announcement, he posted on Truth Social urging companies to relocate operations to the U.S.

He called it a “GREAT time” to move, promising zero tariffs, quick energy connections, and no environmental red tape. “DON’T WAIT, DO IT NOW!” he wrote.

The impact was felt in the crypto market as well. Bitcoin briefly dropped below $76,000 following the news, reflecting broader uncertainty in global financial markets.

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