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The Trump administration has intensified the U.S.-China trade conflict by imposing a new 50% tariff on Chinese imports, on top of an existing 34% duty, raising the total tariff rate to 104%. The sweeping new levies, which also impact 184 other U.S. trading partners, took effect at 12:01 a.m. ET on Wednesday.
The decision came in response to China’s retaliatory tariffs and marked a serious deterioration in trade relations between the world’s two largest economies. In a statement, White House press secretary Karoline Leavitt criticized Beijing’s response: “It was a mistake for China to retaliate.”
China quickly vowed to “fight to the end,” condemning the U.S. move as economic aggression. The two nations engaged in $585 billion worth of trade last year, with the U.S. importing $440 billion in goods from China and exporting $145 billion. This resulted in a $295 billion trade deficit, a figure far below the $1 trillion figure repeatedly cited by Trump in recent days.
Trump previously imposed major tariffs on Chinese goods during his first term, and the Biden administration retained and expanded many of them. Over time, these measures reduced China’s share of total U.S. imports from 21% in 2016 to 13% in 2023.
However, analysts note that Chinese exporters have adapted by rerouting shipments through Southeast Asian countries like Malaysia, Vietnam, Cambodia, and Thailand. A 2023 U.S. Commerce Department report showed that Chinese solar panel manufacturers were assembling products in these countries before shipping them to the U.S., effectively bypassing tariffs. The new reciprocal tariffs on these nations aim to block such circumvention.
The impact of these elevated tariffs will be significant. With Chinese goods now facing over 100% import taxes, items such as smartphones, electronics, toys, and batteries—many of which are vital for the U.S. tech and EV industries—are expected to become substantially more expensive. Smartphones, in particular, are a key import category, accounting for 9% of all U.S. imports from China, including models made in China for Apple.
Apple’s market valuation has already taken a hit, dropping 20% in the past month, largely due to concerns over rising trade barriers.
U.S. exports to China—mainly soybeans, petroleum, and pharmaceuticals—are also likely to be affected by Beijing’s countermeasures. Soybeans, a crucial food source for China’s massive pig population, remain the top export from the U.S. to China.
However, the trade conflict may not stop with tariffs. China plays a dominant role in the global supply of critical metals like copper, lithium, and rare earth elements essential for modern industry. Beijing has previously restricted exports of germanium and gallium, which are used in military technologies such as radar and thermal imaging. It could expand these controls to put further pressure on Washington.
Meanwhile, the U.S. could escalate its technological blockade by limiting China’s access to advanced semiconductors. Former Trump trade advisor Peter Navarro floated the idea this week of pressuring countries like Mexico, Cambodia, and Vietnam to sever trade ties with China or risk losing access to the U.S. market.
Analysts warn that a full-blown trade war between the U.S. and China—together accounting for 43% of global GDP—could tip the global economy into a slowdown or even recession. Investment, supply chains, and trade flows would likely suffer across the board.
China, which already runs a nearly $1 trillion goods trade surplus, may also face challenges if major export markets like the U.S. shut their doors. Much of China’s output is sustained by domestic subsidies and state support, such as low-interest loans and preferential treatment for key industries. A prolonged trade conflict could force Beijing to reassess its export-driven growth strategy.
With the new tariffs in place and rhetoric hardening on both sides, the path forward appears increasingly volatile. The world’s two economic superpowers now find themselves locked in a high-stakes standoff, with global repercussions likely to follow.