China Responds to US Tariffs with Retaliation and Market Warning Amid Global Selloff

China hits back after Trump imposes 34% tariffs, warns of rising US inflation as global markets plunge in response to trade war escalation.

 

Beijing, China – China responded sharply on Saturday to U.S. President Donald Trump’s decision to impose new tariffs, asserting that “the market has spoken” after global stocks saw their worst week since the pandemic. The statement came as Beijing called for “equal-footed consultation” with Washington, warning of serious global economic repercussions.

 

On Friday, Trump announced a 34% tariff on Chinese imports, bringing the total tariff rate on Chinese goods to 54% in 2025. In a further move, he also eliminated a trade loophole that had allowed low-value Chinese goods to enter the United States duty-free.

 

Beijing responded swiftly with retaliatory measures, matching the 34% tariff on all U.S. goods and introducing export restrictions on certain rare earth materials—critical components in electronics and green technologies.

 

Global markets reacted with alarm. The S&P 500 fell 9% for the week, marking its steepest decline since 2020. Other major indices followed suit, reflecting investor concern over escalating U.S.-China tensions and their broader impact on global trade and inflation.

 

“The market has spoken,” said Chinese foreign ministry spokesperson Guo Jiakun in a Facebook post, accompanied by a graphic showing sharp U.S. market declines. “Now is the time for the U.S. to stop doing the wrong things and resolve differences with trading partners through equal-footed consultation,” Guo added.

 

Multiple Chinese commerce associations representing sectors such as textiles, electronics, food, and chemicals released coordinated statements urging domestic firms to seek new international markets. The statements also warned of the knock-on effects of U.S. tariffs, including inflation and a heightened risk of economic recession in the United States.

 

China's food and agricultural products chamber emphasized the need for internal unity and external cooperation, stating that “China’s import and export industry must strengthen ties and broaden global reach.”

 

The chamber for metals and chemicals echoed this sentiment, asserting that the new tariffs “will push up import costs for U.S. businesses, raise prices for American consumers, and increase recession risks.”

 

Beijing’s retaliatory actions are viewed as part of a broader effort to pressure Washington into reconsidering its aggressive tariff strategy, which has already disrupted supply chains and heightened geopolitical tensions.

 

As both nations harden their stances, economists warn that a prolonged trade war could have severe implications not only for the two countries involved but also for the global economy, which is still recovering from years of pandemic-induced disruption.