China slaps heavier tariffs on US as Trump’s 104% tariffs kick in, stocks tumble

China announced new tariffs on US goods on Wednesday, increasing trade tensions just hours after President Donald Trump’s latest round of tariffs went into effect. 

The move sent shock waves through global stock markets already on edge, with major indexes in Asia and Europe tumbling.

Beijing raised tariffs to 84% on US imports, more than doubling a previous rate of 34% that came into force on Friday. 

The State Council, which acts as China’s cabinet, issued a sharp rebuke, saying the US had “made a mistake upon a mistake” by escalating tariffs. 

It claimed Trump’s approach to tariffs violated China’s rights and undercut the rules-based international trading system.

Trump’s so-called “Liberation Day” tariffs, which impose new duties on 86 nations, started at 12:01 am EST on Wednesday. 

Multiple increases pushed the rate on Chinese imports to 104%, escalating a trade war that analysts fear will become even harder to resolve.

“The US move to escalate tariffs on China is a mistake upon a mistake,” said the State Council in a statement. 

“It seriously infringes upon China’s legitimate rights and interests and undermines the rules-based multilateral trading system.”

With the two largest economies trading blows, tensions between Washington and Beijing have soared. 

The State Council had previously urged that disputes be settled “through dialogue and consultation.” 

Its latest message, however, warned China would continue to “take firm and forceful measures to safeguard its own interests.”

Foreign Ministry spokesman Lin Jian confirmed that position, emphasizing his country’s readiness to protect its economy. 

Despite the strong words, Chinese officials also left the door open for talks, releasing a white paper saying they hoped the US and China could “meet each other halfway.”

White House spokeswoman Karoline Leavitt suggested on Tuesday that Trump is willing to talk, but insisted Beijing must initiate contact. 

“The president also wanted me to tell all of you that if China reaches out to make a deal, he’ll be incredibly gracious,” said Leavitt. 

“China has to call first.”

Market reaction has been swift. 

In Asia, Japan’s benchmark Nikkei 225 plummeted nearly four percent, while both South Korea’s KOSPI and Australia’s ASX 200 slid roughly two percent. 

Hong Kong’s Hang Seng Index, home to many Chinese exporters, opened down almost four percent before ending the day in positive territory.

European stock markets also sank on Wednesday. 

London’s FTSE 100, France’s CAC 40, Germany’s DAX, and the broad-based STOXX 600 dropped by up to 3.5%. 

Sentiment in pharmaceutical stocks was especially fragile after Trump announced a forthcoming “major tariff on pharmaceuticals” while speaking at a Republican Party event in Washington, DC. 

Drug makers such as AstraZeneca, GSK, Roche, Sanofi, Novartis, and Novo Nordisk saw their share prices drop between five and seven percent in early European trading.

Meanwhile, the European Union (EU) is expected to vote soon on its own response to Trump’s tariffs on steel and aluminum. 

It is expected that the EU will enact countermeasures targeting a wide range of US imports at tariffs of up to 25%.

Analysts warn that the resulting headwinds will continue to rattle financial markets. 

With neither side appearing ready to retreat, the global economy risks being drawn deeper into a potentially prolonged trade war.