Shares of U.S.-listed Chinese companies tumbled on Tuesday after the White House confirmed that a new 50% tariff on imports from China took effect at noon Eastern Time, sharply escalating trade tensions between the world’s two largest economies.
The new levy raises the total U.S. tariff rate on Chinese goods to 104%, after Beijing refused to roll back a 34% retaliatory tariff announced last Friday.
U.S. President Donald Trump accused China of having “record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation.”
“Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on his social media platform Truth Social on Monday.
White House Press Secretary Karoline Leavitt said this Tuesday the additional duties will be collected beginning Wednesday, April 9.
Earlier in the day, the U.S. President had written that “China also wants to make a deal, badly, but they don’t know how to get it started,” while adding that the Administration was “waiting for their call. It will happen!”
In response to the new U.S. tariffs, China’s Ministry of Commerce last Friday called the measure “a typical act of unilateral bullying” and said it had filed a formal complaint with the World Trade Organization. The ministry argued that the new tariffs violated WTO rules and harmed the legitimate rights of other member nations.
The dispute weighed heavily on Chinese electric vehicle stocks trading in New York by midday while the S&P500 erased a 4.1% gain. China giants Alibaba and Pinduoduo saw their shares fell 5% and 6%, respectively. Carmaker Li Auto fell 8.3% to $19.72, marking a new 7-month low.
Nio dropped 7% to $3.11, reaching a new 5-year low, while XPeng shares declined 6.9% to $16.52. Shares of the Zeekr Group lost 6.05% $19.27.
China also placed 11 U.S. companies on its “unreliable entities list,” barring them from doing business in the country or cooperating with Chinese firms. In addition, Beijing announced export restrictions on several rare earth elements critical to sectors such as electric vehicles and defense manufacturing.
The latest tariffs are part of a broader package announced by Trump last week, which included new duties ranging from 10% to 54% on goods from more than 180 countries and regions. China was hit with the highest rate, while Vietnam and Taiwan faced 46% and 32% tariffs, respectively. Trump also confirmed a 25% tariff on all foreign-made vehicles and auto parts.
