China to Impose 34% Reciprocal Tariffs on U.S. Imports

What Happened?

China said on Friday it will impose a 34% reciprocal tariff measure on the U.S. in response to President Donald Trump's sweeping tariff plan.

The announcement comes just days after President Trump unveiled a baseline tariff of 10% on all goods coming into the U.S.

China as a result could reach tariffs as high as 54%.

'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,' China’s State Council Tariff Commission said in a statement.

The new measures against the U.S. will reportedly go into effect on April 10.

Trump took to Truth Social Friday to express remarks toward China and their decision to engage in a trade battle.

'China played it wrong, they panicked — the one thing they cannot afford to do,' Trump said.

He stated countries like Vietnam are engaging with his administration to potentially cut U.S. tariffs down to zero.

But Chinese Foreign Ministry spokesperson Guo Jiakun told reporters Thursday that the U.S. tariff hikes on imports under the pretext of reciprocity 'gravely violates World Trade Organization rules.'

The 34% tariffs announced against China are in addition to 20% tariffs already imposed to address the threat of synthetic opioids, including fentanyl, flowing into the U.S.

Why it Matters

Trump's announcement aims to boost U.S. manufacturing but has triggered sharp drops in the market.

The Dow Jones, S&P 500, and Nasdaq indexes have all dropped, experiencing some of their worst days reportedly in five years.

Some have pointed to Trump's announcement as the biggest upheaval of global trade norms since World War II.

As of Saturday, the 10% universal tariff went into effect, while the reciprocal measures for specific countries will begin on April 9.

Trump has already imposed a 20% tariff on goods from the European Union as Mexico and Canada are still subject to 25% tariffs.

Although economists warn the new taxes will result in higher prices and slower growth, the president believes that now 'would be a PERFECT time for Fed Chairman Jerome Powell to cut interest rates.'

'Energy prices are down, interest rates are down, inflation is down, even eggs are down 69%, and Jobs are up, all within two months,' Trump said Friday. 'A BIG WIN for America.'

He accuses Fed chairman Powell of 'playing politics.'

However, experts still predict that other countries could likely be pushed into recession.

Stellantis temporarily laid off 900 workers at five U.S. facilities, according to reports, as a result of import tariffs of 25% on cars and car parts.

Some assembly plant production in Mexico and Canada was also temporarily paused.

How it Affects You

Trump states these levies aim to 'rectify trade practices that contribute to large and persistent annual United States goods trade deficits.'

His administration supports that these tariff measures are the first steps to bringing more production and jobs to the U.S.

The flashing-red warning sign from Wall Street has experts concerned about the impact tariffs will have on inflation and consumer costs down the line.

That includes the possibility of the average American worker's spending power being impacted in pursuit of addressing trade imbalances.