The situation with US and Chinese tariffs in April 2025 is rapidly evolving and involves several layers. Here's a more detailed breakdown:
Background:
* US Initial Tariffs: The United States, under President Trump, had already imposed several rounds of tariffs on Chinese goods in the lead-up to April 2025. These were implemented citing concerns over trade imbalances, intellectual property theft, and other economic practices.
* "Reciprocal Tariffs": On April 2, 2025, President Trump announced a new policy of "reciprocal tariffs" under the International Emergency Economic Powers Act (IEEPA). This initially involved a 34% tariff on all imports from China, effective April 9, 2025. The justification given was to counter what the US considered unfair trade practices and to address the fentanyl crisis. This 34% was in addition to existing tariffs.
China's Initial Retaliation:
* In response to the US announcement on April 2nd, China quickly stated it would impose a 34% retaliatory tariff on all US goods, with an effective date of April 10, 2025. This was seen as a direct mirror of the US action.
* China also announced other countermeasures at this time, including:
* Export control measures on certain rare earth elements.
* Adding several US companies to export control and "unreliable entity" lists.
* Launching anti-dumping and anti-monopoly investigations into US companies.
* Suspending the export qualifications of some US companies.
Escalation by the US:
* On April 7, 2025, President Trump reacted to China's announced 34% retaliatory tariff. He threatened that if China did not withdraw this tariff by April 8th, the US would impose an additional 50% tariff on Chinese goods, effective April 9th.
China's Further Retaliation:
* As you initially stated, China did not withdraw its announced tariff. In response to the US's escalated threat and the implementation of the higher US tariffs, China announced a further increase to its retaliatory tariffs.
* On April 9, 2025, China declared it would raise its tariff on all US goods to 84%, effective April 10, 2025. This new rate includes the initially announced 34% plus an additional 50%, directly mirroring the additional tariff imposed by the US.
* Along with the increased tariff, China announced further measures, including adding more US companies to its "unreliable entity" list and export control lists.
Key Points to Understand:
* Mirroring: China's retaliation has largely been a direct response, attempting to match the percentage increase of the US tariffs.
* Stacking Tariffs: The new tariffs are often added on top of existing ones, leading to very high total duties on certain goods. For example, some Chinese goods entering the US now face a total tariff of 104% (previous tariffs + 34% + 50%). Similarly, US goods entering China will face a total of 84%.
* Broader Impact: These escalating tariffs are expected to have significant consequences for businesses and consumers in both countries, potentially leading to higher prices, reduced trade, and economic uncertainty. The global stock market has also reacted negatively to these developments.
* "Fight to the End": China's rhetoric has been strong, indicating a willingness to continue retaliating against further US tariff actions.
This situation highlights a significant escalation in the trade tensions between the US and China in April 2025.