April 9, 2025 — Washington / Beijing. The fragile global trade order is being tested once again as the United States and China enter a new and more aggressive phase of economic confrontation. Over the past 48 hours, President Donald Trump pushed forward with sweeping 104% tariffs on Chinese goods, triggering a swift and forceful retaliation from Beijing, which announced countertariffs raising duties on U.S. imports to 84%.

The sharp tit-for-tat escalation, paired with legal and strategic retaliation from China, underscores a rapidly deteriorating trade relationship between the world’s two largest economies — one that’s already rattling global markets and testing diplomatic channels.

Trump’s “Reciprocal” Tariff Blitz

On Tuesday, President Trump confirmed his administration would move forward with the 104% tariffs, despite late-stage talks with U.S. allies and ongoing hopes of brokering diplomatic trade solutions. Speaking at an energy event in the White House, Trump touted the move as necessary for protecting U.S. industries and securing leverage in future trade negotiations.

“We’re doing very well in making — I call them tailored deals, not off the rack,” Trump said, referencing discussions with countries like South Korea and Japan.

“China wants to make a deal — badly — they just don’t know how to start. We’re waiting for their call.”

According to the administration, nearly 60 countries have approached the U.S. in recent days to seek trade exemptions or renegotiations. However, Trump labeled China as one of the “worst offenders,” and has taken a particularly hard stance on Beijing.

Beijing’s Swift Response: 84% Tariffs and WTO Lawsuit

Just hours after the U.S. tariffs went into effect, China responded on April 9 with its own economic counterpunch. According to a government statement, Beijing will raise cumulative tariffs on U.S. imports to 84%, effective April 10.

China’s retaliation went beyond tariffs:

• Filed a formal complaint at the World Trade Organization (WTO)
  
• Added six U.S. firms to its “unreliable entity list”
  
• Imposed export controls on twelve additional American companies

The Chinese Ministry of Commerce denounced Washington’s move as a “mistake on top of a mistake,” but stopped short of closing the door on diplomacy.

“Trade and tariff wars have no winners, and protectionism leads nowhere,” a spokesperson said. “We will not flinch when trouble comes our way.”

Markets Recoil as Optimism Fades

Financial markets around the world reacted with alarm.

• U.S. equity futures fell 1.7% following China’s retaliation
  
• European markets dropped more than 4%, reflecting fears of broader economic fallout

Investors had initially responded positively to news of potential trade talks, but optimism evaporated once both countries reaffirmed their hardline stances.

More Than Just Trade: Fentanyl and Strategic Grievances

Trade is just one front in this geopolitical rift. The Trump administration has also linked earlier tariff rounds to China’s alleged role in fentanyl trafficking, accusing Beijing of doing too little to stop precursors from entering the U.S.

China, in turn, has accused Washington of exploiting the fentanyl issue as a “pretext for economic blackmail.”

In addition, Washington has criticized non-tariff barriers used by Beijing to restrict access to its markets. These complaints were highlighted in a recent report by the U.S. Trade Representative, citing systemic disadvantages for American companies operating in China.

No Direct Talks Between Trump and Xi — Yet

Notably, President Trump has not spoken directly with Chinese President Xi Jinping since returning to office in January 2025. While both sides have left the door open for future negotiations, neither appears willing to make the first move toward de-escalation.

Looking Ahead: Uncertain Terrain

With tariffs now at their highest levels in modern history, and diplomatic communication at a near standstill, analysts warn that the global economy could face deeper shocks if the standoff drags on.

While Trump insists that these measures will benefit the U.S. Treasury and protect key industries, critics — both foreign and domestic — warn that consumers and exporters could bear the brunt of the costs.

“There can be permanent tariffs — and there can also be negotiations,” Trump told reporters. “Because there are things we need that go beyond tariffs.”

One thing is clear: The U.S.–China trade war has entered a new and more volatile phase, and the consequences are likely to ripple far beyond Washington and Beijing.