China Imposes 84% Tariff on U.S. Goods in Retaliation

The General Administration of Customs of China announced on April 9, 2025, that starting from 12:01 on April 10, 2025, an additional 84% tariff will be imposed on all imported goods originating from the United States, on top of the existing tariff rates. This decision comes as a response to the U.S. government's recent increase in the 'reciprocal tariff' on Chinese goods exported to the U.S., which was raised from 34% to 84% on April 8, 2025. The U.S. had previously implemented a 10% duty on most imports and higher country-specific tariffs as part of President Trump's Reciprocal Tariffs Executive Order.

This move by China marks the third round of retaliatory measures against the United States. The additional 34% tariff on all U.S. goods, effective from April 10, 2025, is a direct response to the U.S. government's decision to increase tariffs on Chinese goods. The U.S. had initially placed 34% tariffs on Chinese goods, to which China responded with a similar tariff on U.S. goods. The latest escalation by the U.S. to increase tariffs to 84% has prompted China to retaliate with an additional 34% tariff on all U.S. goods.

For goods that have been shipped from the port of origin before 12:01 on April 10, 2025, and imported between 12:01 on April 10, 2025, and 24:00 on May 13, 2025, the additional tariff will not apply. This grace period allows for goods already in transit to avoid the new tariffs, providing some relief to businesses caught in the middle of the escalating trade dispute.

The escalating tariffs between the two largest economies in the world have raised concerns about the potential impact on global trade and the broader economy. The U.S. economy was estimated to grow at about 1.7 percent this year, while China is growing at five percent. The trade dispute could have significant implications for both countries, as well as for other countries that rely on trade with either the U.S. or China.

China's decision to impose additional tariffs on U.S. goods is likely to have a significant impact on U.S. exporters, who will face higher costs and potentially reduced demand for their products in the Chinese market. The tariffs could also lead to supply chain disruptions and increased costs for U.S. companies that rely on Chinese inputs for their production processes.

For China, the tariffs could have a similar impact, as Chinese exporters will face higher costs and potentially reduced demand for their products in the U.S. market. However, China has been diversifying its export markets in recent years, and may be better positioned to weather the impact of the tariffs. China's exports to the ASEAN bloc rose by 12 percent last year, with significant gains also in Latin America, Africa, and Russia. China-BRICS trade alone is now worth over US$1 trillion per annum.

The escalating trade dispute between the U.S. and China is likely to have significant implications for global trade and the broader economy. The tariffs could lead to supply chain disruptions, increased costs for businesses, and reduced demand for goods and services. The dispute could also have geopolitical implications, as the two countries are major players on the global stage. The situation remains fluid, and it is unclear how the dispute will ultimately be resolved. However, the escalating tariffs are a clear indication of the deepening rift between the two countries, and the potential for further escalation in the trade dispute.