The Chinese government was on Friday, April 4, the first major economy to fire back against President Donald Trump's new levies, with an announcement that it would slap 34% tariffs on all imports of US goods, from April 10. The new tariff matches the rate of the U.S. "reciprocal" tariff imposed by US President Donald Trump this week. Countries and companies alike weighed their options and the EU readied for talks with US officials. Potential responses could include retaliatory tariffs or other measures that could escalate a trade war that has raised fears of recession.
Additionally, China said it had filed a lawsuit with the World Trade Organization (WTO) over sweeping US tariffs imposed on its exports. "China has filed a lawsuit under the WTO dispute settlement mechanism," Beijing's commerce ministry said in a statement, adding that saying the US tariffs were "a typical unilateral bullying practice that endangers the stability of the global economic and trade order."
China – one of the US's top trading partners – also imposed exports controls on seven rare earth elements, its commerce ministry said, including gadolinium, which is commonly used in MRIs, and yttrium, which is used in consumer electronics.
Meanwhile, China’s customs administration said it had suspended imports of chicken from two U.S. suppliers, Mountaire Farms of Delaware and Coastal Processing. It said Chinese customs had repeatedly detected furazolidone, a drug banned in China, in shipments from those companies. Finally, the Chinese government said it has added 27 firms to lists of companies subject to trade sanctions or export controls.
Equities and commodity prices extended a global rout for markets on Friday after China hit back over the tariffs. Frankfurt's main DAX index of German blue-chip companies plunged more than 5% moments after the Chinese government announcement. Paris tumbled 4.2% and London gave up 3.9% in early afternoon deals.
Copper – a vital component for energy storage, electric vehicles, solar panels and wind turbines – slumped 5.1% to $8,890.50 a tonne, its biggest intraday drop since July 2022. Meanwhile, oil futures plummeted around 7%, having already plunged some 6.5% on Thursday, on the prospect of weaker demand. News that OPEC+ had unexpectedly hiked crude supply more than planned added to the steep selling.