President Donald Trump said China has "panicked" in its retaliation to his tariffs, saying Beijing has "played it wrong," signaling there may not be a swift resolution to the unfolding trade conflict between the two economic powerhouses.
The Chinese finance ministry said on Friday it would impose a 34% additional tariff on all U.S. imports from April 10, among other targeted countermeasures. Trump had unveiled a 34% additional tariff on Chinese imports on Wednesday.
"CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!" Trump wrote on his Truth Social platform on Friday morning.
The stock markets have opened sharply down on Friday morning in response to the unfolding trade war, extending Thursday's losses.
Why it Matters
The tariff tit-for-tat between the U.S. and China signals an escalation in one of the world's most critical trade relationships, potentially impacting global markets and supply chains.
It reflects rising tensions that could reverberate across industries ranging from agriculture to electronics. The resulting market volatility highlights investor unease over prolonged trade uncertainty between the world's two largest economies—and a potential recession.
How China Hit Back
As with earlier countermoves to U.S. trade penalties, including the 34% on American goods tariff announced Friday, Beijing hit back with targeted action.
The Commerce Ministry in Beijing said it will impose more export controls on rare earths, which are materials used in high-tech products such as computer chips and electric vehicle batteries.
Included in the list was samarium and its compounds, which are used in aerospace manufacturing and the defense sector. Another element called gadolinium is used in MRI scans.
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.
Additionally, the Chinese government said it has added 27 firms to lists of companies subject to trade sanctions or export controls.
China also filed a lawsuit with the World Trade Organization, saying the U.S. tariffs were "a typical unilateral bullying practice that endangers the stability of the global economic and trade order."
What People Are Saying
Wang Huiyao, president of the Chinese think tank Center for China and Globalization, told AP that Trump's tariffs are "self-defeating".
She said China's strategy is to trade more with Southeast Asia and Latin America, with Europe, the Middle East and other developing nations.
"The likely outcome is that China will become the largest trading nation and its economy will be trading more with other nations and the U.S. may ... become more isolated," Wang said.
Joe Mazur, geopolitics analyst at policy consultancy Trivium, told Reuters the tariffs would harm Trump's China policy: "The fact that Trump is potentially alienating so many U.S. trade partners at the same time certainly, in my opinion, weakens the overall impact.
"It might also allow China to find common cause with other countries facing down Trump's tariffs, and if not coordinate a response, then at least it will incentivize other countries to mend fences with China."
U.S. Commerce Secretary Howard Lutnick told CNBC's Squawk Box: "This is the reordering of fair trade. It's about those nontariff trade barriers. That's what we are addressing. I expect most countries to start to really examine their trade policy towards the United States of America and stop picking on us."
What's Next
With China's tariffs set to take effect on April 10, attention now turns to how both governments may seek further leverage or offramps.
The WTO lawsuit filed by China adds legal complexity that could take years to resolve, while its shift toward alternative trading partners may signal a long-term decoupling strategy.
U.S. firms facing Chinese sanctions may press Washington for relief or retaliation, and markets are likely to remain volatile amid uncertainty.
Meanwhile, as Beijing signals its intention to restrict rare earths and broaden export controls, high-tech industries dependent on these materials may face supply chain disruptions, prompting a scramble to secure alternative sources.
This article includes reporting by The Associated Press.
