China Raises Tariffs to 84% in Response to Trump’s 104% Import Levies

In a dramatic escalation of trade tensions, China has raised tariffs to 84 per cent on US imports as a countermeasure to US President Donald Trump's latest tariffs, which came into effect Wednesday and increased levies on Chinese goods to 104 per cent. China said it would impose the 84 per cent tariffs starting Thursday, raising planned import taxes on American goods by 50 percentage points from the previously announced 34 per cent, as it hit back in the intensifying trade war.

The move comes after Trump rolled out his “liberation day” tariffs on 60 countries, with $430 billion worth of Chinese exports targeted. The total US-China tariff burden now stands at 115 per cent if including levies from Trump’s previous term, according to the South China Morning Post. Markets reacted sharply. The FTSE 100 plunged 3.6 per cent by lunchtime. The Stoxx 600 across Europe dropped over 4 per cent, while France’s Cac 40 fell 3.8 per cent and Germany’s DAX lost 3.7 per cent.

China's move follows its earlier decision last week to impose 34 per cent tariffs on all American goods. However, in a measured response on Wednesday, Beijing refrained from announcing new retaliatory tariffs, despite asserting it would “fight to the end.” Chinese Foreign Ministry spokesperson Lin Jian reaffirmed China's firm stance, stating, "We will not tolerate any attempt to harm China's sovereignty, security and development interests." He criticized the US for “bullying and hegemonic acts” and called for dialogue based on mutual respect.

China has already retaliated by targeting $30 billion in US agricultural goods, hitting Trump’s political base. It has also imposed export controls on rare earth metals, vital to the US tech and defense industries. China’s economy, already weighed down by weak exports, a collapsing housing market, and sluggish domestic demand, faces added pressure. Larry Hu, chief China economist at Macquarie, estimates the new tariffs could reduce Chinese exports by 15 per cent and GDP growth by 2–2.5 percentage points.

To soften the blow, the People's Bank of China allowed the yuan to weaken, enhancing export competitiveness. Meanwhile, Premier Li Qiang stated that China has “enough policy tools” to counter external shocks and maintain stable growth. Despite the mounting tension, Beijing is leaving the door open for talks—if Washington engages with respect and equality.