Last Thursday, U.S. President Donald Trump confirmed new tariffs on imported goods, as it had been promised. The tariffs start at a baseline minimum of 10% and steep higher on countries such as Taiwan (32%), Vietnam (46%) and China (54%). The President also established a 25% tariff on all foreign-made vehicles and their parts.
Trump further escalated trade tensions this Monday by threatening to add a new 50% duty from Wednesday (April 9th) if China does not “withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th.”
China’s Reaction
On Friday morning, China’s Ministry of Commerce (MOFCOM) called the action a “a typical act of unilateral bullying”, announcing a 34% duty on U.S. goods.
The ministry also placed 11 U.S. companies on its “unreliable entities list”, banning them from doing business in China or working with Chinese firms. It also introduced export restrictions on certain rare earth elements vital to sectors like electric vehicles and defense technology.
Later on Friday, China has also filed a lawsuit with the World Trade Organization (WTO) over the United States’ “reciprocal tariffs”, with the MOFCOM stating that these violate WTO rules, as well as harming the legitimate rights of the organization’s members.
Trump Threats
Donald Trump took to his social media Truth Social on Monday to threaten the world’s second largest economy, declaring that “the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th” if China “does not withdraw its 34% increase above their long term trading abuses by tomorrow, April 8th”.
The White House has confirmed to CNBC that if the President’s threat is carried out, tariffs on Chinese goods will total 104%. This includes Trump’s newly announced 34% tariffs last week, the pre-existing 20% duties on Chinese products, and the additional 50% he is pushing for as part of increased pressure.
As of the time of writing, Nio‘s U.S.-listed shares are trading at $3.27, 5.5% lower from the previous close, while Zeekr is at $20.29 (-4.7%) and XPeng at $17.17 (-11.5%). Shares of the Beijing-based carmaker Li Auto are currently trading 9.5% lower reaching a new 7-month low, at $20.89.
Last year, the Biden Administration quadrupled the U.S. tariffs on imported electric vehicles from China, increasing duties to 100% from 25%. Over the last few years, several Chinese carmakers have delayed their plans for a possible expansion to the U.S. market — something likely to remain delayed as trade tensions with China escalate.
Here’s the full Donald Trump’s statement:
“Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set.
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.
Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your attention to this matter!”
