China Retaliates with 34% Tariff on U.S. Imports: What Will Get More Expensive?

The Chinese government has decided to impose a 34% tariff on U.S. imports, just one day after U.S. President Donald Trump enacted a 34% duty on China, in addition to the previous 20%. At 54%, China is one of the worst-hit countries by Trump’s tariffs.

Reuters reported that China’s Finance Ministry announced it would impose these additional tariffs on all U.S. goods starting April 10. Beijing also revealed plans to control exports of medium and heavy rare-earth elements—such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—effective April 4.

In a statement, the Ministry of Commerce explained that these export controls were being implemented to safeguard national security, protect China's interests, and fulfil international obligations, including non-proliferation commitments.

Additionally, the Chinese government added 11 foreign entities to its "unreliable entity" list, granting Beijing the authority to impose punitive actions on these entities.

The Ministry of Commerce warned that necessary steps would be taken to protect China's economic interests, labelling Trump's tariffs as an "unjustified attempt" to undermine China's growth and disrupt global trade stability.

According to the U.S. Trade Representative's (USTR) office, total trade between the U.S. and China stood at an estimated $582.4 billion in 2024. U.S. exports to China in 2024 were $143.5 billion, down 2.9% ($4.2 billion) from 2023, while imports from China reached $438.9 billion, an increase of 2.8% ($12.1 billion) from 2023. This resulted in a U.S. trade deficit of $295.4 billion, a 5.8% increase ($16.3 billion) from 2023, highlighting America's heavy dependence on Chinese goods.

Some of the key U.S. imports that could be impacted by China's tariffs include soybeans, pork, and wheat. China also imports electronics such as smartphones, tablets, laptops, computers, and televisions from major U.S. companies, including Apple.

Other essential U.S. imports affected by the tariffs include semiconductors, automobiles and auto parts, industrial machinery for construction, agriculture, and mining, as well as heavy equipment like engines and turbines.

Additionally, goods that could be affected by the tariffs include pharmaceuticals, wine, processed foods, nuts, clothing and apparel, and luxury goods.

It is clear that the retaliatory tariffs, which have sparked a trade war between the U.S. and China, will have far-reaching consequences.

Impact on Consumers

Consumers in both China and the U.S. will bear the brunt of the tariff war. Chinese consumers and businesses that rely on U.S. imports will face higher prices on goods. This could affect sectors like electronics, automotive parts, and agricultural products. On the U.S. side, consumers could experience price hikes in categories like electronics, clothing, and other consumer goods due to higher tariffs on Chinese imports. This could lead to inflation and erode purchasing power.

Similarly, U.S. manufacturers who depend on Chinese imports for intermediate goods or raw materials may face higher production costs, leading to increased prices for finished goods. This would affect both domestic consumers and businesses.

A 34% tariff imposed by China on U.S. imports could lead to significant disruptions in trade, raising costs for consumers and businesses in both countries and potentially altering global trade dynamics. While the immediate effects could be damaging for both economies, the long-term consequences will depend on how both nations adjust their policies and trade relationships in response to these increased tariffs.