China Hits Back by Raising Tariff on US Goods to 84% After Trump’s ‘Reciprocal’ Duties Take Effect

China Hits Back by Raising Tariff on US Goods to 84% After Trump’s ‘Reciprocal’ Duties Take Effect

April 9, 2025 | By Steven Orlowski, CFP, CNPR

In a swift and forceful response to President Donald Trump’s newly imposed “reciprocal” tariffs on Chinese imports, the Chinese government announced today that it will raise tariffs on a broad range of U.S. goods to as high as 84%, marking a sharp escalation in the simmering trade dispute between the world’s two largest economies.

The move comes just days after the Trump administration reintroduced a controversial package of duties aimed at “leveling the playing field” with Beijing, citing unfair trade practices, intellectual property theft, and China’s alleged failure to uphold previous trade commitments. The new U.S. tariffs, which took effect on April 7, target over $100 billion worth of Chinese exports, including electronics, steel, textiles, and automotive components.

China’s Ministry of Commerce responded Tuesday with a sweeping countermeasure, increasing tariffs on more than 1,200 categories of U.S. products, including agricultural goods, energy exports, automobiles, and industrial machinery. The maximum rate—an eye-watering 84%—is set to hit select U.S. agricultural exports hardest, particularly soybeans, corn, pork, and dairy products, sectors that are politically significant in key U.S. states.

“We do not seek conflict, but we will not hesitate to defend our national interests,” said Ministry spokesperson Gao Jian during a press briefing in Beijing. “These measures are a direct and necessary response to the aggressive and unilateral actions of the U.S. government.”

Markets React and Farmers Fear Fallout

Financial markets reacted nervously to the announcement. U.S. stock indexes dipped in early trading Wednesday, with industrial and agricultural stocks among the hardest hit. The Dow Jones Industrial Average fell 1.7%, while the S&P 500 slid 1.3%.

American farmers, already weathering several years of volatile global demand and climate challenges, expressed deep concern. “An 84% tariff is basically a door slammed shut,” said Mark Hensley, a soybean farmer from Iowa. “We worked hard to rebuild markets after the last trade war. This could wipe out all those gains in one stroke.”

Trump Defiant

Despite the backlash, President Trump doubled down on his stance during an interview on Fox Business Tuesday evening. “We’ve been taken advantage of for decades,” Trump said. “What I’ve done is enforce fair trade. If China wants to hit us with tariffs, fine—we’ll just buy American.”

Trump’s administration argues that the so-called “reciprocal tariffs” are a necessary corrective measure. Under the new policy, the U.S. imposes the same level of duties on goods from countries that tax U.S. exports more heavily—a concept Trump championed during his 2016 and 2024 campaigns.

Global Concerns and Diplomatic Fallout

The renewed trade hostilities have raised alarms beyond the U.S. and China. The European Union, Japan, and South Korea have all urged restraint, warning that an intensifying tariff war could derail fragile global economic recovery efforts.

“This is not just a bilateral issue,” said Christine Lagarde, President of the European Central Bank. “Global supply chains are interconnected. A tariff escalation of this magnitude has the potential to ripple far beyond U.S. and Chinese borders.”

U.S. allies are also watching closely to see whether the Trump administration will apply the “reciprocal tariff” policy to their exports as well, potentially setting off a broader realignment of global trade norms.

What’s Next?

Trade analysts say the outlook remains volatile, with both sides signaling a readiness to escalate. “This is a high-stakes game of chicken,” said Mei Li, a senior fellow at the Brookings Institution. “Both governments are under domestic pressure to appear tough. But behind the rhetoric, there’s likely a desire to bring both sides back to the negotiating table.”

Whether diplomacy can prevail before real economic pain sets in remains to be seen. In the meantime, U.S. exporters face significant new barriers in one of their largest and most critical markets, and American consumers may soon begin to feel the pinch as prices rise and supply chains shift.