US Tariffs: China Strikes Back With 34% Tariffs on US Goods, Sparks Trade War Fears

US Tariffs: China on Friday announced whopping 34% additional tariffs on United States goods and products. The development has come in retaliation to US President Donald Trump's trade tariff announcement on April 2. These additional tariffs by China on US imports will be implemented from April 10.

China's Ministry of Finance condemned the duties imposed by Donald Trump administration and termed it a case of "typical unilateral bullying practice". In its press release, China's Ministry of Finance said, "A 34% tariff will be imposed on all imported goods originating from the United States based on the current applicable tariff rate."

The new tariff rates will be imposed above the current bonded, tax reduction and exemption policies, whereas the additional tariffs will not be reduced or exempted.

"This practice of the US is not in line with international trade rules, seriously undermines China's legitimate rights and interests, and is a typical unilateral bullying practice," read a press release by China's Ministry of Finance. China's retaliation on Donald Trump's trade tariff announcement has sparked fear of a trade war and will likely cause disruptions.

China Adds 11 American Firms To 'Unreliable Entities'

Apart from retaliating against America's trade tariff on April 2, China's Finance Ministry announced to list eleven American companies in its category of 'unreliable entities. The decision would prevent these eleven US companies from doing their businesses in China or with Chinese companies, reported The New York Times.

To prevent the United States's access to rare earth elements mined in China, Xi-Jin Ping's government has imposed a licensing system to restrict exports of seven rare earth elements. These elements are found exclusively in China and have wide utility in electric cars to smart bombs.

US President Donald Trump's tariffs have exemption on certain sectors like pharmaceuticals and semiconductors. In contrast to US trade tariffs announced by Donald Trump, China's freshly imposed levies have no exceptions.

Donald Trump Tariff announcement

US President Donald Trump on April 2 had announced trade tariffs on multiple countries including China, Vietna, Canada Mexico. While some nations, including the United Kingdom, Singapore, Brazil, will face base rate tariffs, Trump administration imposed higher tariffs on 'worst offenders' including European Union, Vietnam, China, Thailand, etc.

The United States imposed 34% tariffs on China, which amounted to 54%, including its earlier tariffs. Whereas, other countries like Guana, Liberia, etc were imposed with similar high tariffs.

Tariffs Imposed By Donald Trump Administration in February

Donald Trump Administration's recent announcement of 34% trade tariffs on China has come months after it imposed fresh tariffs on Chinese goods to prevent illicit drug trafficking in India.

Donald Trump, immediately after returning as the President of the United States in January, imposed fresh rates of tariffs on China, Mexico, and Canada. In January, Trump had already imposed two tranches of 10% of additional duties on all Chinese imports. His announcement sparked massive criticism from China which reacted to his announcement by imposing additional tariffs.

What differentiates, Beijing's reaction to Washington's fresh tariffs in April from its January's retaliation is the timing and its aggressiveness. China's retaliatory additional tariffs on US imports including agricultural products and fuel will significantly impact the global trade dynamic sending shockwaves across nations.

The recent retaliatory tariffs by China against Donald Trump administration's levy has revived memories of US-China trade war initiated nearly seven years ago in 2018. Donald Trump, during his first tenure as US President, sparked a trade war with China after he announced to hike tariff rates by 25% points on more than $50 billion worth of commodities and a tariff of nearly 10% points on commodities worth $200 billion worth imported from China. US tariffs sparked massive criticism from China, as well as retaliatory tariffs.