President Donald Trump is set to impose a staggering 104% tariff on all Chinese imports this Wednesday, White House Press Secretary Karoline Leavitt announced on Tuesday. This will be added to the existing tariffs from Trump’s first term.
Previously, tariffs on China were set to rise by 34% as part of Trump’s “reciprocal” tariffs package. However, the president has added another 50% due to China’s failure to back down from its promise to impose 34% retaliatory tariffs on U.S. goods by noon Tuesday. This brings the total duties on Chinese goods to 104%.
Earlier on Tuesday, China’s Commerce Ministry expressed firm opposition to the additional tariffs, calling them “a mistake upon a mistake” and vowed to escalate its retaliation on U.S. exports.
Following Leavitt’s comments, U.S. stocks, which had surged earlier in the day, began to decline. The Dow fell by 320 points, or 0.84%, while the S&P 500 dropped by 1.57%, and the Nasdaq Composite slid 2.15%.
“Countries like China, who have chosen to retaliate and double down on their mistreatment of American workers, are making a mistake,” Leavitt stated. “President Trump has a spine of steel, and he will not break.”
She further added, “The Chinese want to make a deal, they just don’t know how to do it.” When pressed about any specific terms that Trump might accept to reduce tariffs on China, Leavitt declined to share details.
Asian markets closely followed Wall Street’s downward trend, with Japan’s Nikkei 225 opening around 3% lower on Wednesday, and Hong Kong’s Hang Seng also dropping 3%. South Korea’s Kopsi and Australia’s ASX 200 index were each down by about 1%.
In addition to increasing China’s overall tariff rate, Trump signed an executive order on Tuesday evening tripling tariffs on goods worth less than $800 from China. These goods, previously exempt from tariffs under the “de minimis” exemption, were initially set to face a 30% tariff by May 2. Trump’s new executive order raises that rate to 90%, which is expected to raise prices on popular items ordered from sites like Shein, Temu, and AliExpress.
Earlier in February, Trump had imposed a 10% tariff on all Chinese goods, tying it to China’s alleged role in illegal immigration and the fentanyl crisis. Last month, those tariffs were doubled.
China was the U.S.’s second-largest source of imports last year, sending $439 billion worth of goods to the U.S., while the U.S. exported $144 billion worth of goods to China. These mutual tariffs are likely to harm domestic industries and could lead to job losses.
At the end of Trump’s first term, the average tariff on Chinese goods was 19.3%. The Biden administration maintained most of these tariffs, raising the average to 20.8%. With the new tariffs set to take effect Wednesday, the average tariff on Chinese exports to the U.S. will soar to nearly 125%.
Potential Countermeasures
China’s state media and social media users have responded defiantly to Trump’s threat of additional tariffs. Two prominent commentators linked to Beijing shared a list of potential countermeasures, including significantly raising tariffs on U.S. agricultural products such as soybeans and sorghum, banning U.S. poultry imports, suspending fentanyl cooperation, limiting market access for U.S. services like legal consultancies, restricting or banning U.S. films, and investigating the earnings of U.S. companies in China.
“China does not provoke trouble, but it is not afraid of it either,” wrote Liu Hong, senior editor at Xinhua, sharing the list on social media.
While previous rounds of Chinese tariffs led many U.S. businesses to shift manufacturing to countries like Mexico and Vietnam, China remains the top foreign source for many products, including toys, smartphones, computers, and consumer electronics, all of which will likely become more expensive for U.S. consumers.
In addition to the tariffs on China, many other countries and the European Union face a midnight deadline for new tariffs, ranging from 11% to 50%. Leavitt stated that despite ongoing negotiations with world leaders, Trump is not inclined to delay his plans.
After speaking with Trump earlier on Tuesday, Leavitt confirmed, “He expects that these tariffs are going to go into effect.”
However, she noted that Trump had instructed his trade team to create “tailor-made” deals with countries seeking negotiations. When asked about a specific timeline or deadline for these deals, Leavitt reiterated that these would not be “off-the-rack deals.”
