China has threatened to retaliate after US President Donald Trump announced the biggest tariffs on Thursday, which are anticipated to shake the trade policies between world’s largest economies, a Bloomberg report said.
China called on the US to cancel the new tariffs immediately and promised to take action to protect its own interests. “China firmly opposes this and will resolutely take countermeasures to safeguard its own rights and interests,” the Chinese Ministry of Commerce said condemning the levies and urging the US to resolve all conflict via dialogue.
Trump’s tariff hike against China
Trump had announced a 34% tariff hike on almost all Chinese products on Wednesday. Economists have said that the new tariffs have hiked the average US tariff on Chinese goods to as much as 65%. This includes both the tariffs from Trump’s first term, which were continued under the Biden administration, the Bloomberg report said. These new tariffs will come into effect from April 9. This move of Trump is part of a broader strategy to impose tariffs on world trade partners, the report added.
US-China Trade Impact
The new tariffs have increased the average US tariff on Chinese products to around 65%. Economists warn that this could cause significant economic impacts on both the US and China.
Currency and Market Reactions
Following Trump’s tariff announcement, the Chinese yuan weakened in both onshore and offshore markets. It dropped by as much as 0.7%, marking the largest decline since December. Despite efforts from China’s central bank and major lenders to stabilise the currency, the new tariffs have led to further financial pressure.
China’s Response to the Tariffs
China’s state-run Xinhua News Agency has criticised the new tariffs, calling them “self-defeating bullying.” They slammed the US saying that it is undermining the global trade system, which benefits both countries, and instead harming the global economy, the Bloomberg report added.
China has already taken steps to restrict its companies from investing in the United States, a Bloomberg report said. The move is to gain more influence in possible trade talks with Trump’s administration, as per the report, which cited people familiar with the matter.
In response to the tariffs, China could hike tariffs on US goods and limit exports of key minerals. China has already retaliated against US tariffs that were imposed previously. Experts warn that this latest move could escalate tensions even further which may potentially cause more damage, Bloomberg report said.
US Plans to end Tariff Exemptions
Along with the new tariffs, the US also announced end of the De Minimis exemptions, which currently allow small shipments (worth $800 or less) from China and Hong Kong to enter the US without tariffs. The Bloomberg report sayd hat this change will be effective from May 2 and is expected to impact online retailers like Shein and Temu, which rely on these exemptions for their business models.
China’s Economic Challenges
These new tariffs may also put pressure on China’s already struggling economy. The country faces an oversupply of goods, leading to lower prices, and the tariffs will most likely lead to a decrease in the demand for Chinese exports even more.
Impact on China’s Consumer Market
Despite government efforts to boost consumption through subsidies for cars and home appliances, China’s consumer inflation has fallen more than expected, the Bloomberg report said. Additionally, expectations for future business in the manufacturing sector weakened in March, reaching the lowest level in 2025.
US-China trade war to escalate?
Since Trump returned to office, tensions between the US and China have not been better. The POTUS has not spoken with Chinese President Xi Jinping for over two months, and the two countries remain in a standoff over the fentanyl trafficking issue. Trump has accused China of not doing enough to stop fentanyl precursors from entering the US, which he also gave as a reason for the 20% tariffs that were imposed this year.