China Hit Hard! Faces 54% in U.S. Tariffs Over Two Rounds Halts Investments in U.S. in Retaliation

China Hit Hard! Faces 54% in U.S. Tariffs Over Two Rounds – Halts Investments in U.S. in Retaliation

The United States, under President Donald Trump, has announced an additional 34% tariff on Chinese imports, set to take effect on April 9, 2025. Combined with the existing 20% tariff, the total import tax on Chinese goods now stands at 54%—the highest in history and close to the 60% rate Trump previously campaigned on.

According to Bloomberg, this new round of tariffs will affect nearly all Chinese goods exported to the U.S., worth over $500 billion in 2024. One analyst from Bloomberg Economics compared it to going from "bullets to a bazooka" in terms of trade impact.

China is responding swiftly. Reports indicate that Beijing has ordered a halt on Chinese investments in the U.S., particularly through delays in registration and approval processes by key economic planning bodies such as the National Development and Reform Commission (NDRC). This move is seen as a way to strengthen China's leverage in any potential trade negotiations with the Trump administration.

While China previously placed restrictions on overseas investments for reasons of national security and capital outflow control, this latest measure signals heightened tensions between the world’s two largest economies. In 2023, China’s direct investment in the U.S. amounted to $6.9 billion.

So far, there is no impact on previously approved investments or Chinese holdings of U.S. government bonds. However, it remains unclear how long the suspension of new applications will last.

Earlier, China responded to the first round of tariffs by imposing duties on American imports, restricting rare earth exports, and launching investigations into U.S. companies. These steps are expected to continue as part of China’s broader retaliation strategy.