By China has responded forcefully to the U.S.’s latest tariff hike by announcing a 34% levy on all American imports and restricting the export of key rare earth materials, heightening fears of a renewed global economic conflict.
This retaliatory move follows Washington’s new tariffs imposed under the Trump administration, which accused Beijing of unfair trade practices. In a press release, China’s Ministry of Commerce described the U.S. actions as “blatantly hegemonic” and confirmed sweeping restrictions on critical exports like terbium and dysprosium—metals vital to green tech and defense manufacturing.
In addition to curbing rare earth exports, China has placed 11 major U.S. firms on its ‘unreliable entities list,’ effectively cutting them off from critical areas of its domestic market. The announcement has rattled investors, heightening fears on Wall Street of a prolonged economic standoff that could undermine global recovery efforts..
Economic analysts warn the fallout could impact everything from electric vehicle production to smartphone assembly, potentially sending ripple effects through supply chains in Europe and Asia.
While diplomatic channels remain open, expectations for de-escalation are low in the short term. A summit between U.S. and Chinese trade officials is reportedly being considered, but no formal talks have been announced.