104% vs 84%, Market Watches Trump's Reaction to China's Tariffs

China Raises Tariffs by 84% + Files WTO Complaint, Expands Blacklist

EU to Decide Response Today, Canada Reaffirms 25% Tariff on US Cars

Tariffs 104% vs 84%. The US and China have entered a full-scale trade war. With news of China's 84% tariff, tension is rising ahead of the US stock market opening as to how Trump will respond this time.

On the 9th (local time), China's State Council Tariff Commission announced that it would raise tariffs on US products from 34% to 84% starting on the 10th. China also stated it would file a complaint against the US with the World Trade Organization (WTO). Six US companies were added to the unreliable entity list, and 12 US companies were added to the export control list.

With China's announcement of an 84% tariff on US products, Dow futures fell by 2% and S&P 500 futures by about 1.7% before the US market opened. European stocks plunged more than 4%. Apple's stock, heavily affected by Chinese tariffs, fell up to 2% in pre-market trading.

This is a response to Trump's second retaliation, which raised tariffs on Chinese products to 104%, effective from April 9. With China's resistance, the US-China trade war is expected to be prolonged.

The previous day, President Trump, after a call with South Korea's acting President Han Duck-soo, expressed confidence that negotiations with South Korea would proceed well, saying, "China will also come to the negotiating table with the US." However, US Trade Representative Jamison Greer testified in Congress the previous day, stating, "So far, there has been little indication from China about negotiations."

On the morning of the 9th, China argued in a report that the US trade deficit, as the world's largest consumer, is inevitable. Along with this, it warned that if President Trump continues to hit Chinese products, it has "the resolve and means to continue the fight."

China's response has put the trade between the world's two largest economies at risk of being halted. According to the US Trade Representative (USTR), the US exported $143.5 billion (212 trillion won) worth of goods to China in 2024 and imported $438.9 billion (649 trillion won) worth of goods.

Trump warned against retaliation by other countries when announcing reciprocal tariffs last week. While Japan and South Korea are entering tariff negotiations, China seems to have chosen a hardline response.

On April 2, President Trump announced an additional 34% tariff on China, on top of the existing 20% tariff, to which China responded with a 34% tariff on the US. Subsequently, President Trump announced an additional 50% increase, bringing the total tariff on Chinese goods to 104%.

Before announcing reciprocal tariffs in April, the US imposed a 20% tariff on China. Trump announced a 20% tariff on China along with Canada and Mexico shortly after taking office.

Meanwhile, European Union (EU) countries are expected to approve their first response measures to Trump's tariffs today.

According to Reuters, the European Commission, responsible for the EU's trade policy, proposed additional tariffs exceeding 25% on imports of US motorcycles, poultry, fruit, wood, clothing, and dental floss. These measures will be implemented in stages.

Canada reaffirmed its plan to impose a 25% retaliatory tariff on US vehicles the previous day. This includes not only vehicles that do not comply with the United States-Mexico-Canada Agreement (USMCA) but also USMCA-compliant finished vehicles imported from the US that contain non-Canadian and non-Mexican parts.

Guest Reporter Kim Jung-ah kja@hankyung.com