China Retaliates with 34% Tariff on US Goods, Tightens Grip on Rare Earth Exports

BEIJING: In a sharp escalation of trade tensions, China on Friday announced a 34% tariff on all imports of U.S. goods, set to take effect from April 10, marking its most aggressive response yet to the latest wave of U.S. tariffs imposed by the Trump administration.

The retaliatory measure was confirmed by China’s Ministry of Commerce, which described the move as “necessary and proportionate” following Washington’s sweeping new levies targeting Chinese products.

In a parallel move that is likely to further unsettle global supply chains, Beijing also imposed export controls on seven rare earth elements, tightening restrictions on critical materials vital to industries ranging from medical imaging to advanced electronics.

Among the restricted elements are gadolinium, widely used in MRI contrast agents, and yttrium, a component in LEDs, smartphones, and flat-panel displays.

“These decisions are aimed at safeguarding China’s national interest and economic security,” the commerce ministry said in a statement Friday morning, adding that the export licensing process for these materials would be “significantly more stringent.”

The announcement sent tremors through global markets already reeling from the economic fallout of the U.S. tariffs. Rare earth prices surged on commodity exchanges, with technology and automobile sectors expected to bear the brunt of potential shortages.

Analysts warn the tit-for-tat measures could tip the fragile global economy into deeper volatility. With the April 10 enforcement deadline drawing near, businesses worldwide are scrambling to assess supply chain vulnerabilities and revise sourcing strategies.

Beijing’s response underscores the strategic leverage China holds in the rare earths market, where it accounts for over 60% of global production. The move also signals that trade friction is now extending well beyond traditional goods and into the realm of strategic resources and advanced manufacturing.