China Retaliates Against Trump Tariffs, Countries Gain or Lose

BEIJING, SATURDAY — The trade war between China and the United States has escalated. While other countries are still seeking negotiations, China has taken firm retaliatory measures in response to the import tariff increases imposed by U.S. President Donald Trump. The world is affected, with some countries benefiting and others suffering losses.

China imposed a reciprocal tariff of 34 percent on all U.S. import products on Friday (4/3/2025). This tariff will take effect on April 10, 2025.

"This US practice is inconsistent with international trade rules, seriously harms China's legitimate rights and interests, and is a typical unilateral bullying practice," the State Council Tariff Commission of China said in a statement, as reported by CNN.

Beijing's move is a further retaliation against a series of import tariff increases from Washington. On April 2, 2025, Chinese products were once again subjected to a 34 percent tariff after Trump imposed two rounds of 10 percent tariffs on China in February and March.

China's response this time is much firmer compared to several months ago. In February 2025, China responded to U.S. tariffs by imposing a 15 percent tariff on imports of coal and liquefied natural gas, as well as a 10 percent tariff on crude oil, agricultural machinery, and large-engine vehicles from the U.S. A month later, China retaliated by increasing an additional 15 percent tariff on U.S. agricultural imports.

In addition to the 34 percent increase in import tariffs, China has also implemented strict controls regarding the export of rare earth metals (REM), essential elements for advanced technology. Beijing continued its actions by filing a complaint with the World Trade Organization (WTO).

China has also suspended imports of sorghum, poultry, and bone meal from six U.S. companies and has added 27 companies to the list of businesses subject to trade restrictions. Beijing has launched an antitrust investigation into DuPont China Group Co, a subsidiary of the U.S.-based chemical company DuPont de Nemours, Inc.

Through the social media platform Truth Social, Trump responded to China's actions. "China is playing it wrong, they are panicking—one thing they cannot afford to do," he wrote.

Gabriel Wildau, managing director of consultancy Teneo, said Beijing’s tough response reflected the Chinese leadership’s diminishing hopes of reaching a trade deal with the US, at least in the short term.

“Beijing’s tough response could trigger further escalation, with no sign that Chinese President Xi Jinping and Trump will soon meet or speak on the phone to ease tensions,” Wildau said.

Craig Singleton, a senior China fellow at the Foundation for Defense of Democracies in Washington, added that if previous responses had been with a scalpel, this time China was wielding a sword. He said China’s new tariffs fell short of triggering a full-blown trade war, but they marked a clear escalation that Chinese President Xi Jinping was unwilling to back down under pressure.

Like Wildau, Singleton warned that the escalation was squeezing the space for diplomacy. “The longer this drags on, the harder it will be for both sides to de-escalate without losing face,” he said.

The stock market was also filled with concerns about China's response. The three main stock indexes in New York that had already plunged further, last Friday. At the close, the Dow recorded a decline of 5.5 percent, the S&P 500 fell 6 percent, and the Nasdaq Composite fell 5.8 percent. These US stock exchanges recorded their worst performance in the last five years, since the Covid-19 pandemic.

“Sentiment is very fragile at the moment. Investors are really in a ‘give me cash now’ phase, worried that other countries will follow China’s lead, and the US president will respond to China tariffs with higher costs,” said Chris Beauchamp, Chief Market Analyst at IG Group.

Beauchamp continued, the current trade war has not happened in years, maybe even decades.

Jack Scoville, vice president of Chicago-based Price Futures Group, said many U.S. export businesses will suffer. “We’re pissing everybody off. That’s the problem. Where are we going to turn if we’ve slapped everybody with tariffs?” Scoville said.

China remains the largest market for U.S. agricultural products. However, U.S. agricultural imports have fallen recently, to $29.25 billion in 2024 from $42.8 billion in 2022.

China's retaliation will accelerate its efforts to find alternative suppliers for agricultural products, such as soybeans. In addition to China, the European Union is likely to retaliate by imposing tariffs on U.S. soybeans.

Chicago Board of Trade (CBOT) soybean futures closed down 3.4 percent at $9.77 a bushel on Friday, the lowest level since late December 2024.

“It’s like shutting down all US agricultural imports. We’re not sure if any imports will be worth the 34 percent tariff,” said a Singapore-based trader at an international trading firm that sells grains and oilseeds to China.

Brazil will be one of the parties that can benefit from the trade war situation between the world's two largest economies. China has started to shift soybean demand from the US to Brazil.

“Brazil will be the main beneficiary, the largest supplier that can replace US soybeans to China. However, other countries can also benefit, including Argentina and Paraguay. For wheat, Australia and Argentina will benefit,” said Carlos Mera, Head of Agricultural Market Research at Rabobank.

Sol Arcidiacono, head of Latin American grain sales at HedgePoint Global Markets, said local soybean prices in South America will strengthen throughout the year, thanks to the escalating trade war. (AP/AFP/REUTERS)