China has imposed an 84% tariff on US imports, a significant escalation from its previous 34% rate, in direct response to Donald Trump’s 104% levy on Chinese goods. The retaliatory measures, announced by China’s finance ministry, will take effect from Thursday as Beijing positions itself as a defender of free trade against what it characterises as American “bullying”.
State-controlled media outlets have launched a coordinated messaging campaign, with China Central Television portraying Trump’s strategy as deliberately targeting weaker nations to “pick off countries one by one as they go to Washington with the begging bowl”. In contrast, China claims it will “show the whole world our firm determination to safeguard the multilateral trade system”.
President Xi Jinping has reportedly called for “deepened all-round cooperation” with neighbouring countries and stronger supply chain ties, in what appears to be a calculated move to leverage Trump’s trade policies to enhance China’s regional influence.
Financial markets have responded negatively to the escalating tensions. The FTSE 100 dropped 2.9%, while the European Stoxx 600 fell 3.6%. US indices also declined, with the S&P 500 and Dow Jones industrial average falling 0.4% and 0.7% respectively, though the tech-focused Nasdaq managed a slight gain of 0.18%.
JPMorgan Chase CEO Jamie Dimon has warned that a US recession is now likely, noting that market instability “feeds on itself” as investors see losses in retirement accounts and pensions, forcing consumers to “cut back”.
The tariffs come at a particularly challenging time for China’s already sluggish economy, where exports remain crucial for growth amid weak domestic consumption. Chinese businesses report struggling to adapt their supply chains, with one anonymous logistics business owner lamenting that the tariffs will shrink “already razor-thin profit margins”.
Despite Trump’s claims on Truth Social that it’s a “GREAT time” for companies to relocate to the US, offering “ZERO TARIFFS” and “almost immediate” energy connections with “no environmental delays”, investor confidence appears shaken as global recession fears intensify.