On April 2025, the US announced an additional 50% tariff on Chinese goods entering the US starting April 9, citing 'reciprocal countermeasures', adding to the previously implemented 34% retaliatory tariff and historical accumulated rates, bringing the total tariff rate to 104%. This policy is a continuation of the Trump administration's 'maximum pressure' strategy, aiming to force China to make concessions in trade and technology.
1. Policy background and direct incentives
China's countermeasures trigger US escalation: On April 5, 2025, China announced a 34% tariff on all imported goods from the US as a response to US unilateral tariffs. This move directly impacts US agriculture, energy, and high-tech industries, provoking a strong reaction from the US.
Trump's logic of 'reciprocal tariffs': Trump believes that the US has long endured a trade deficit with China (reaching $295 billion in 2023), and that China has gained advantages through 'illegal subsidies' and 'currency manipulation'. He argues that imposing tariffs will 'balance trade' and claims that tariffs are a means of 'charging China'.
2. The controversy surrounding tariff policies
Doubtful calculation methods: US tariffs on China are not uniformly applied to all goods but are implemented in batches and by category. For example, the 34% tariff covers most industrial products, while the 10% tariff targets specific items (such as electric vehicles and semiconductors). Therefore, the 104% rate is more symbolic, and the actual impact needs specific analysis.
Unilateralism and rule conflicts: The US's actions violate WTO rules and lack international consensus. Traditional US allies like the EU and Canada have initiated countermeasures, leading to further risks of fragmentation in the global trade system.
Impact on China, the US, and the global economy
1. Short-term impacts
Chinese export enterprises face increasing pressure: The US is China's third-largest trading partner (14.6% share in 2024), and tariffs will directly impact industries like electronics, machinery, and textiles that rely on the US market. For example, if Apple passes on costs, the price of iPhones could rise by 40%, leading to order losses.
US inflation and rising consumer costs: US consumers will bear the cost of tariffs, potentially increasing annual household expenditure by $5,000. At the same time, US stocks have plummeted due to declining corporate profit expectations, losing nearly 50 trillion yuan in market value.
Accelerated supply chain restructuring: Some companies may shift production capacity to countries like Vietnam and Mexico, but Vietnam's reliance on Chinese intermediate goods is as high as 80%, making it difficult to completely replace the Chinese supply chain in the short term.
2. Long-term games and structural changes
China's industrial upgrading and domestic demand-driven growth: The proportion of China's exports to the US has decreased from 19.2% in 2018 to 14.7% in 2024, with domestic demand contributing over 70%. Tariff pressures are forcing companies to shift towards high value-added areas, such as new energy vehicles and AI technology.
Restructuring of the global trade pattern: RCEP and the Belt and Road Initiative deepen regional cooperation, with China-ASEAN trade expected to reach 4.5 trillion yuan in 2024, a growth of 10%. China reinforces its bargaining power over key resources through countermeasures such as export controls on rare earths and the unreliable entity list.
China's response and coping strategies
1. Firm countermeasures and legal battles
China's Ministry of Commerce has made it clear that it 'strongly opposes' the US's escalation of tariffs and may take further measures, such as expanding the unreliable entity list and restricting key technology exports. At the same time, China is challenging the US's unilateral actions through the WTO dispute resolution mechanism.
2. Diversified markets and technological innovation
Expanding emerging markets: In 2024, export growth to Africa and Latin America is expected to exceed 15%, hedging against dependency on the US.
Technological self-sufficiency: The domestic production rate of semiconductors has increased to 30%, and China has become the world's largest exporter of new energy vehicles, reducing 'choke point' risks.
3. International rules and alliance building
China collaborates with the EU, ASEAN, and others to promote reforms in the multilateral trade system, advocating for 'inclusive globalization'. For example, the RCEP's accumulation rules for origin reduce trade barriers and enhance the resilience of regional supply chains.
Future outlook: Coexisting risks and opportunities
Doubtful sustainability of US policies: Over 1,200 anti-tariff protests have occurred in the US, with companies like Tesla and Apple pressuring the government to adjust policies. If the risk of economic recession increases, Trump may be forced to compromise.
The decoupling between China and the US is difficult to reverse but can be controlled: Basic commodity trade (such as agricultural products and energy) remains complementary, but there will be long-term competition in high-tech fields. China needs to balance openness and security to avoid falling into the 'new cold war' trap.
In summary, the US's imposition of a 104% tariff is an extreme manifestation of unilateralism and protectionism, with significant short-term impacts, but long-term will accelerate the restructuring of global supply chains and China's economic transformation. China needs to respond to challenges with resilience, uphold rights through rules, and promote the establishment of a fairer international trade order.