By Brian Swint and Callum Keown
China retaliated against President Donald Trump's tariffs Friday as the global trade war intensified. But Trump has a clear message for investors: He won't back down.
The world's second-largest economy will impose an additional 34% tax on all U.S. goods from April 10, the country's tariff commission announced Friday.
"This practice of the US is not in line with international trade rules, seriously undermines China's legitimate rights and interests, and is a typical unilateral bullying practice," it said in a statement.
The commission added that Trump's levies "not only undermines the interests of the United States itself, but also endangers global economic development and the stability of the production and supply chain."
In a post on Truth Social after the China reaction, Trump said: "To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than ever before!!!"
Stocks slumped further Friday following Thursday's selloff.
Global markets were falling after U.S. stocks had their worst day since the start of the Covid-19 pandemic. The Nikkei in Japan dropped 2.8% on Friday. Chinese markets were closed for a holiday. Germany's DAX index was falling 4.5% and the STOXX 600 Europe was down 4.6%. U.S. stock futures for the Dow Jones Industrial Average and the S&P 500 were also pointing around 3% lower.
China's retaliation is a significant moment in what's becoming a full-blown trade war. It's the first big announcement of a retaliation, apart from Canada's Prime Minister Mark Carney saying he would match the 25% levy on vehicle imports.
After initial expressions of disappointment and promises to respond, for the most part foreign leaders are still thinking about whether immediate retaliation or offering to negotiate is the best option.
For his part, Trump suggested negotiations are what's next on the agenda. Despite some Administration officials saying the tariffs are permanent, Trump posted a clip on this Truth Social site saying the "rest of the world wants to see -- is there any way they can make a deal." And Eric Trump, the president's son who isn't officially part of the Administration, posted on Thursday that "the first to negotiate will win -- the last will absolutely lose."
Time may be short to get negotiations done before the impact of tariffs causes a recession or other lasting harm to the economy. Analysts on Wall Street say the time limit may be two months at most -- otherwise the U.S. could tip into stagflation, in which inflation is too fast and growth stagnates.
Trump doesn't appear worried about the market reaction so far. "It's going very well -- the markets are going to boom, the stock is going to boom, the country is going to boom," he said Thursday evening.
Write to Brian Swint at brian.swint@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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April 04, 2025 09:22 ET (13:22 GMT)
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