China will impose sweeping 84% tariffs on U.S. goods starting Thursday, up from the 34% previously announced, its finance ministry said Wednesday, marking the latest escalation in a deepening global trade war ignited by U.S. President Donald Trump.
The move comes just hours after Trump’s controversial “reciprocal” tariffs took effect, slapping an eye-watering 104% duty on Chinese imports and levies on dozens of other countries. The European Union is reportedly finalizing its own retaliatory measures.
The tit-for-tat tariff hikes have rattled financial markets worldwide, threatening to unravel decades of trade policy and sparking fears of a global recession. Wall Street reeled Wednesday as investors digested the scale of Trump’s measures, with a brutal selloff in U.S. Treasuries and a slump in global equities and commodities.
“Markets are in panic mode,” said one strategist. “The trade war has gone from rhetoric to economic warfare.”
China’s finance ministry condemned Washington’s actions as reckless and damaging, issuing a sharply worded statement: “The U.S. escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously undermines the rules-based multilateral trading system.”
In addition to the tariff increases, Beijing slapped new restrictions on 18 American companies, many in the defense sector, adding to the more than 60 U.S. firms already targeted in earlier rounds of retaliation.
U.S. Treasury Secretary Scott Bessent dismissed China’s response as “a losing proposition,” accusing Beijing of avoiding serious negotiations. “They are the worst offenders in the international trading system,” he told Fox Business Network.
The intensifying trade dispute has already led to trillions of dollars being wiped from global stock markets this week. Oil prices plunged to new four-year lows, and U.S. stock index futures signaled deeper losses ahead. Even traditional safe havens like the dollar and Treasuries showed signs of stress, with investors seemingly pulling out across the board.
“This is becoming a high-stakes game of chicken,” said one analyst. “But the longer it goes on, the more damage it does to everyone.”
With no end to the standoff in sight, businesses, investors, and governments around the world are bracing for more turbulence in the days ahead.
