China announces 34% retaliatory tariffs on US imports

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China has announced duties of 34 per cent on all US imports in retaliation to Donald Trump’s tariffs, moving the world closer to a full-blown trade war as the US president vowed he would never back down.

Global stock markets extended their losses on Friday after Beijing’s statement, with futures tracking the S&P 500 down 3 per cent and the Europe-wide Stoxx 600 4.3 per cent lower.

China’s Ministry of Commerce said on Friday that its new tariff, which matches Trump’s latest increase in duties on Beijing, would be imposed on all imported goods from the US from April 10, a day after America’s “reciprocal” levies come into effect.

Its move was accompanied by a slew of other measures, including restrictions on rare earth exports and a probe of the China subsidiary of DuPont, the US chemicals giant.

Hours later, the US president said he would persist with his policy, which will take Washington’s tariffs to their highest for more than a century, despite the falls on Wall Street and other stock exchanges around the world.

“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he posted on his Truth Social network. “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!”

Trump’s announcement this week of the 34 per cent tariff on Chinese imports to the US will take Washington’s total levies on Chinese goods to more than the 60 per cent he threatened during last year’s election campaign.

Beijing, which had previously considered such a level of tariffs as a worst-case scenario, denounced the new US duties as “a typical unilateral bullying move”.

It added that this week’s round of US tariffs “does not comply with the rules of international trade and seriously damages the legitimate rights and interest of China”.

Beijing’s latest measures are likely to have the most impact on US agricultural exports, including soyabeans, wheat and corn. China is also a significant importer of pharmaceuticals, crude oil, petroleum gas and liquefied natural gas from the US.

The trade war comes at a sensitive moment for Chinese President Xi Jinping, who has leaned on exports to steer the world’s second-largest economy through a property sector slump and deflation.

Trump’s move to impose steep tariffs on US trading partners around the world has convulsed markets. On Thursday, about $2.5tn in market value was erased from Wall Street stocks and all of the dollar’s post-election gains were wiped out.

As the falls continued on Friday, the FTSE 100 slumped 3.8 per cent and Germany’s Dax lost 3.7 per cent.

Investors swept into US Treasuries, pushing the 10-year yield down 0.16 percentage points on the day to 3.9 per cent, their lowest since early October.

Beijing is among the biggest targets of the “reciprocal” tariffs unveiled by Trump, who had already imposed a separate duty of 20 per cent on Chinese goods earlier this year.

Andrew Gilholm, head of China analysis at consultancy Control Risks, said Beijing could suffer “major self-inflicted damage” from fully matching US tariffs, given China’s trade surplus with the US and the tariffs it already has in place.

China announced export bans on seven types of rare earths on Friday, while US tech companies, including drone makers Skydio and Brinc Drones, were added to its “unreliable entity” list, which bans Chinese suppliers from selling components to them.