By Staff Writer | The Bajan Observer
In a dramatic escalation of U.S.-China trade tensions, President Donald Trump will impose a staggering 104% in tariffs across all Chinese imports starting Wednesday, according to an announcement Tuesday by White House Press Secretary Karoline Leavitt.
The move sharply ramps up Trump’s “reciprocal tariff” strategy and blindsided markets that had been bracing for a smaller, previously announced 34% hike. The additional 50% penalty was tacked on after Beijing refused to pull back its own 34% retaliatory tariffs by a Tuesday noon deadline.
“Countries like China, who have chosen to retaliate and try to double down on their mistreatment of American workers, are making a mistake,” Leavitt said at a press briefing. “President Trump has a spine of steel, and he will not break.”
She further accused Beijing of being unwilling or unable to make a deal, but declined to specify what terms Trump might consider in order to scale back the tariffs.
U.S. markets, which had rallied early Tuesday on hopes of a trade breakthrough, reversed sharply following Leavitt’s announcement. The Dow Jones Industrial Average closed down 320 points (0.84%), while the S&P 500 slid 1.57% and the Nasdaq Composite plunged 2.15%.
Asian markets mirrored the decline. Japan’s Nikkei 225 opened 3% lower Wednesday, while Hong Kong’s Hang Seng and South Korea’s KOSPI both dropped around 3% and 1% respectively. Australia’s ASX 200 also dipped by 1%.
China’s Commerce Ministry hit back with a strongly worded statement, calling the additional tariffs “a mistake upon a mistake.” The ministry vowed retaliation, with a slate of harsh countermeasures reportedly on the table.
According to two prominent Chinese commentators with ties to Beijing, proposed retaliation could include:
- Hefty new tariffs on U.S. agricultural exports like soybeans and sorghum
- A ban on American poultry imports
- Suspension of fentanyl cooperation
- Tighter restrictions on U.S. service firms, especially legal consultancies
- A crackdown on U.S. intellectual property earnings
- A potential ban on American films
“China does not provoke trouble, but it is not afraid of it either,” wrote Liu Hong, a senior editor at Xinhua, China’s state news agency.
In another major policy shift, Trump also signed an executive order Tuesday night tripling tariffs on all Chinese imports under $800 — items that had previously been exempt under the so-called “de minimis” rule.
These low-cost packages, often shipped from platforms like Shein, Temu, and AliExpress, were already set to face a 30% levy beginning May 2. The new order boosts that to 90%, raising the likelihood of price hikes on a wide array of consumer goods.
This follows a February tariff of 10% on all Chinese goods, initially tied to allegations of China’s role in facilitating illegal immigration and fentanyl trafficking. Trump doubled that to 20% in March, before this latest escalation.
The U.S. imported $439 billion worth of Chinese goods last year, while exporting $144 billion to China. The tariff battle puts a wide range of industries — from consumer electronics to agriculture — in the crosshairs.
According to the Peterson Institute for International Economics, the U.S. imposed an average tariff of 19.3% on Chinese goods by the end of Trump’s first term. The Biden administration held those tariffs and added more, raising the average to 20.8%.
By Wednesday, that number will skyrocket to an average of nearly 125%.
Meanwhile, dozens of other countries — including EU members — are bracing for their own tariff hikes, ranging from 11% to 50%. Despite ongoing diplomatic outreach, Leavitt confirmed that Trump plans to stick to the schedule.
“He expects that these tariffs are going to go into effect,” she said. However, she added that the President is open to “tailor-made” trade deals — but ruled out any “off-the-rack” compromises.