Destination imports: how will China's retaliatory measures against US duties turn out

China's 34% duties on goods in the United States, which were introduced on April 4 in response to a similar measure by Donald Trump, make it possible to call the trade conflict the largest in the last 100 years, experts interviewed by Izvestia believe. If the countries do not negotiate, and the mutual tariffs last at least a quarter, inflation in the United States will jump to pandemic levels, and China's GDP will shrink significantly, economists believe. The global indices continued to sell off on Friday, with major stock indexes losing up to 5% for the second day in a row. The fall also affected the Moscow Stock Exchange, although US charges against Russia have not been introduced. How large—scale trade wars can affect our country is described in the Izvestia article.

How China responded to the US tariffs

China was the first country against which US President Donald Trump imposed increased import duties, and announced retaliatory measures. Beijing will impose additional charges of 34% on imports from the United States, the Tariff commission of the State Council of the People's Republic of China said. The measures will take effect on April 10.

The Chinese side stressed that the actions of the United States do not comply with the rules of international trade, cause serious damage to the rights and interests of the People's Republic of China and are a typical manifestation of unilateral intimidation. Beijing called on Washington to cancel its tariffs, hold consultations and resolve differences.

China has also filed a lawsuit with the World Trade Organization (WTO) over US tariffs.

Trump criticized China for introducing countermeasures.

"China did the wrong thing, they panicked, and that's the only thing they can't afford," the American leader wrote on the Truth Social network.

On April 2, Trump announced the imposition of duties on 185 countries. The base tariff is 10%, but the rate is much higher for individual states. In particular, the largest ones are against Vietnam (46%), China (34%), Taiwan (32%), Thailand (36%), and the European Union (20%). The largest figure relates to Cambodia — 49%. The decree on the introduction of tariffs will be effective from April 9th.

Other countries have not yet announced retaliatory measures, but a reaction may still follow. Vietnam immediately called for negotiations on the duties. German Economy Minister Robert Habeck also insists on negotiations over duties, but allows for a full-fledged response if they fail. French President Emmanuel Macron is much more belligerent — he called on companies to suspend investments in the United States, and also allowed the imposition of duties on American digital services.

The largest trade conflict in 100 years

China's retaliatory measures are quite large—scale, even though supplies from the United States to China are three times less than in the opposite direction, says Olga Belenkaya, head of the macroeconomic analysis department at Finam. The import of products from America to China last year amounted to $143 billion, and the counterflow was $438 billion. That is, the damage to the Chinese economy from Trump's tariffs is expected to be higher than the American side from retaliatory measures.

— If China's steps have been more cautious and selective so far, now the country is showing that it is fully prepared for symmetrical measures. And not only that," Olga Belenkaya noted.

She recalled that Beijing has also imposed restrictions on exports of rare earths to the United States, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, and added 11 American companies to the list of "unreliable organizations," which will effectively prevent them from operating in the Chinese market.

The next step may be a new reaction from Trump — he previously threatened additional duties if retaliatory measures were taken, Olga Belenkaya believes. But, given the unpredictability of the American president, it cannot be ruled out that a tough response may motivate him to start negotiations on tariff reductions.

In any case, we can talk about the largest change in world trade conditions in many decades and the actual abandonment of WTO mechanisms and rules. Fitch had already noted the day before that the average US import tariff soared to 22% from 2.5% in 2024 and reached its maximum since 1910, the expert stressed.

— This is an unprecedented case in post-war history. All this can only be compared with the situation in the early 1930s, when the Smoot-Hawley Act was passed in the United States. This eventually led to a protracted depression in the United States and around the world, the strengthening of the positions of far-right parties in Europe, and the outbreak of World War II. The reasons were not only the tariff war, but it accelerated the onset of all these events," says Kirill Seleznev, an expert on the Garda Capital stock market.

How much will trade between China and the United States decrease

As a result of the introduction of new duties, exports of goods from China to the United States may collapse by 25-35% in April-June 2025 in annual terms, independent expert Andrey Barkhota predicts. According to him, it is unlikely to be possible to redirect the falling volume of Chinese exports to the EU and other countries.

If the duties are not lifted in the near future, then the volume of mutual trade may be reduced within the same 34%, Kirill Seleznev from Garda Capital believes.

China buys mainly agricultural products (soybeans, corn), aircraft and components, machine tools and equipment from the United States, the expert added. And the United States in China — consumer goods: consumer electronics, shoes, clothing, toys, tools, furniture. That is, it is these products that will either significantly increase in price, or they will be much less on sale.

— If the trade war drags on for at least one quarter, then inflation in the United States may exceed 5% (now below 3%). Let me remind you that at the peak of the fuel crisis after February 2022, inflation in America rose to 9%, and after the distribution of pandemic "helicopter money" in 2021, it reached almost 5%, Kirill Seleznev noted.

At the same time, China is currently in deflation, and price growth over the past year has not exceeded 1%. So a return to 2-3% per year would be a boon for him in a sense, the expert added. This will probably restart domestic demand, but the driver can be described as very extreme and even risky. But the country's GDP will definitely decline, he believes.

How global markets react to China's retaliatory duties

It is noteworthy that China announced new sanctions in the evening, Beijing time, after the stock markets closed. The same technique was used by Trump on April 3, when he presented a table with tariffs.

It is still difficult to assess the reaction of the Chinese markets: on April 4, the main stock index of China, the Shanghai Composite, fell by 0.24%, and over the past five days it has lost only 0.89%.

At the same time, European markets continued to fall for the second day in a row. The German DAX and the French CAC lost another 4.5% on the day, while the British FTSE 100 lost 3.5%. American trading platforms also opened in the red: at 17:00 Moscow time, the S&P 500 and Nasdaq dropped by 3%.

The Russian market is also falling despite the fact that Trump's duties have not directly affected our country, and trade between Russia and the United States is extremely insignificant.

The Moscow Exchange index dropped 3.5% to 2,800 points in a day. Gazprom shares lost (-4.5%), Rosneft and Tatneft (-3.5%), NLMK — 5%, Mechel — 6%. Quotes are also falling for banks: Sber fell by 2.7%, VTB — by 4.5%.

— The indirect impact is related to the possible deterioration of conditions in the global economy due to trade wars. In this case, we can expect a reduction in global demand for raw materials such as metals, oil, and petroleum products, which may negatively affect Russian exports," explained Olga Belenkaya from Finam.

Brent crude oil on Friday already fell by 7% in a day to $65 per barrel, the lowest since 2021.

On the other hand, Russia is still acting as an observer. But in theory, it can even make money on the supply of agricultural products and fuel to China after the American market has become less accessible to Asian companies, Kirill Seleznev from Garda Capital shared a positive scenario. Plus, supplies from China to Russia may increase at more favorable prices when local companies start selling stocks produced and harvested for export to the United States.