China’s export machine struck with at least 54% Trump tariffs
Economists expect that the central bank will reduce the amount of cash banks must keep in reserve this quarter, which will allow them to lend more money to households and companies
[NEW YORK] The US has hit China with the biggest-ever tariff hike on almost all Chinese products, bringing total levies to at least 54 per cent, a move that could decimate Chinese shipments to the world’s largest economy.
The new 34 per cent tariffs announced by US President Donald Trump on Wednesday (Apr 2) will add to the 20 per cent tariffs that entered effect earlier this year, hitting most of the US$525 billion worth of goods Chinese firms exported to the US in 2024. The new tariffs will go into effect on Apr 9, he said during an event in the White House Rose Garden.
Macquarie Group has said that China’s GDP growth could be reduced by two percentage points in the event of a 60 per cent tariff rate. Such a levy could more than halve China’s annual growth, according to UBS. Both estimates were made last year.
A simulation by Bloomberg Economics also showed that the trade between the world’s largest economies would shrink to practically nothing with tariffs that high.
These actions by the US may prompt Beijing to add stimulus to the domestic economy to try to compensate for the likely hit to demand. China’s economy was already struggling with a supply glut that was pushing down prices. That issue would likely be exacerbated by a decrease in exports because of the tariffs.
Economists expect that the central bank will reduce the amount of cash banks must keep in reserve this quarter, which will allow them to lend more money to households and companies.
Chinese consumption has shown signs of resilience on a government initiative to subsidise purchases of cars and home appliances. But consumer inflation dropped far more than forecast earlier this year, and expectations for future business in the manufacturing industry weakened for a second month in March to the lowest level in 2025. BLOOMBERG
Share with us your feedback on BT's products and services
