BEIJING/WASHINGTON – China fired back in the deepening trade war with the United States by slapping an additional 34% tariff on U.S. goods Friday, intensifying global economic fears and sparking a major selloff in financial markets.
The move comes after President Donald Trump’s administration raised U.S. tariffs to their highest levels in more than 100 years, impacting not only China but also close allies like Canada. China also imposed export restrictions on rare earth minerals and blacklisted 11 U.S. entities tied to arms deals with Taiwan.
Major stock indices worldwide tumbled, with the Nasdaq sliding into bear market territory. Shares of tech giants heavily reliant on China, such as Apple and Nvidia, dropped 4.7% and 3.4% respectively.
J.P. Morgan raised its recession forecast, now seeing a 60% chance of a global downturn by year’s end. The U.S. Federal Reserve warned the tariffs could lead to both higher inflation and weaker growth.
Despite the turmoil, Trump doubled down, posting on social media: “This is a great time to get rich, richer than ever before!!!” He later accused China of panicking and defended his strategy as necessary to rebalance trade.
The ripple effects were felt globally—Canada’s job market weakened, and Japan’s prime minister declared a “national crisis” as its markets saw their worst week in years. In Europe, leaders are split on how to respond. While President Emmanuel Macron urged companies to freeze U.S. investments, France’s finance minister warned against hasty retaliation.
Meanwhile, consumers may soon feel the sting of higher prices. Analysts estimate that high-end products like Apple’s iPhones could hit nearly $2,300 if companies pass on the costs.
China’s response also complicates Trump’s efforts to finalize a TikTok deal. Though he hinted at tariff relief in exchange for Chinese cooperation, there’s been no confirmation of direct talks with President Xi Jinping.
The global trade war shows no signs of slowing, with analysts warning of long-term consequences for global economic stability and supply chains.