The ongoing trade conflict between the United States and China has reached new heights, with President Donald Trump set to impose a 104% tariff on all Chinese imports starting Wednesday, April 9. 

President Trump announced the additional tariffs after China refused to withdraw its own retaliatory measures—a 34% tariff on all U.S. goods set to take effect on April 10. The U.S. tariffs will include a 50% increase on top of existing duties, which already stand at 54% for Chinese imports. If implemented as planned, this would bring the cumulative tariff rate on Chinese goods to an unprecedented 104%.

The administration has also indicated that all ongoing trade negotiations with China will be terminated unless Beijing reverses its retaliatory actions.

China has remained defiant in the face of U.S. pressure, labeling Trump’s tariff threats as “blackmail” and accusing Washington of “unilateral bullying.” Beijing has vowed to “fight to the end,” asserting that its retaliatory tariffs are necessary to protect its sovereignty and economic interests. Beyond tariffs, China has introduced non-tariff measures, including export restrictions on rare earth materials critical for U.S. industries and adding American firms to its “Unreliable Entity List”.

Chinese officials have also filed complaints with the World Trade Organization (WTO), challenging the legality of U.S. tariffs under international trade rules.

The escalating trade war is expected to have far-reaching economic consequences for both nations and beyond:

• For the U.S.: Tariffs are effectively taxes paid by importers, which are often passed on to consumers through higher prices. Economists predict that these measures will exacerbate inflationary pressures in the U.S., potentially reigniting inflation later this year. Additionally, real GDP growth in the U.S. is projected to decline by 0.6 percentage points in 2025 due to reduced consumer spending and disrupted supply chains.
• For China: The higher tariffs could significantly impact Chinese exports, forcing Beijing to explore alternative markets and implement domestic economic stimulus measures. However, China’s reliance on exports to the U.S.—its second-largest trading partner—makes it particularly vulnerable to prolonged trade tensions.
• Global Impact: The ripple effects of this trade war are being felt worldwide, with other countries scrambling to renegotiate trade agreements with Washington or brace for potential spillover effects. The European Union has called for dialogue between China and the U.S., warning that prolonged conflict could destabilize global trade systems.

Tariffs function as taxes on imported goods, with costs typically passed on to consumers. As a result, prices for everyday items are set to rise sharply. Fresh produce, eggs, and milk—items with shorter shelf lives—are expected to see price hikes within days of the tariffs taking effect. Other products, such as clothing, footwear, electronics, and household appliances, will likely experience increases over the coming weeks and months.

Clothing and textiles are particularly vulnerable, with apparel prices projected to rise by as much as 33% due to the cumulative effects of 2025 tariffs. Food prices are expected to increase by 4.5%, while motor vehicle prices could jump by nearly 16%, adding an estimated $7,600 to the cost of a new car.

Analysts estimate that the average household will incur additional costs ranging from $2,100 to $3,800 annually in 2025 due to higher prices on imported goods Lower-income households are particularly at risk, with annual losses estimated at $980 for those in the bottom income brackets.