China says it will impose a 34 per cent tariff on all US goods and restrict exports of rare-earth minerals as it unveiled its retaliation to US president Donald Trump’s so-called “Liberation Day” tariffs.
The Chinese finance ministry on Friday said the additional 34 per cent tariff on all US goods will begin from 10 April, one day after America’s combined total of 54 per cent tariffs on Chinese imports is due to take effect.
It also imposed restrictions on the export of certain rare-earth elements, specifically medium and heavy rare-earth metals like samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, to the United States, effective immediately.
"The purpose of the Chinese government's implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfill international obligations such as non-proliferation," the Chinese commerce ministry said in a statement.
China also retaliated by adding 11 entities to the "unreliable entity" list, which allows Beijing to take punitive actions against foreign businesses and individuals.
The retaliatory move comes a day after Mr Trump unveiled an additional 34 per cent tariffs on all Chinese goods imported into the US, bringing the combined total of new American levies against the country to 54 per cent.
China was one of the hardest-hit countries in Wednesday’s measures and promised to respond, saying Mr Trump’s actions were "not in line with international trade rules".
The latest tranche of tariffs are on top of the measures imposed by Beijing in February and March, after Mr Trump ordered a new tariff on all Chinese imports of 20 per cent. China responded with a 15 per cent tariff on coal and liquefied natural gas products and an additional 10 per cent on crude oil, agricultural machinery and large-engine cars imported from the US in February.
In March, it ordered a 15 per cent tariff on a wide array of key US farm imports.
Global stocks fell for a second day on Friday as markets reacted to the intensifying global trade war.
Interest rates on the benchmark 10-year US Treasury bond fell below 4 per cent. The UK’s FTSE 100 hit the lowest level since December, falling by about 4 per cent shortly after the announcement, losing around 150 points in the space of an hour.
Dow futures tumbled 1,000 points, or 2.3 per cent. The broader S&P 500 opened lower at 2.4 per cent.
The Chinese finance ministry said it had filed a lawsuit with the World Trade Organisation (WTO), as it accused the US of “unilateral bullying practice that endangers the stability of the global economic and trade order”.
The tariffs regime ordered by Mr Trump "seriously violates WTO rules, damages the legitimate rights and interests of WTO members, and undermines the rules-based multilateral trading system and the international economic and trade order," the spokesperson said.
China's customs administration announced the suspension of chicken imports from two US suppliers, Mountaire Farms of Delaware and Coastal Processing, citing repeated detections of furazolidone, a drug banned in China.
Additionally, the Chinese government has placed 27 firms under trade sanctions or export controls. Of these, 16 companies face a ban on exporting "dual-use" goods – items that can be used for both civilian and military purposes.
The tariffs announcement came late on Friday as most of China celebrated a major public holiday. China is celebrating the Qingming Festival, also known as Tomb-Sweeping Day, a holiday dedicated to honouring ancestors by visiting and cleaning their graves.
