China has announced an additional 34% tariff on all US imports, effective April 10, in response to the United States’ reciprocal tariffs on Chinese exports. The decision, declared by the Customs Tariff Commission of the State Council, marks a sharp escalation in the China-US trade war.

China retaliates against US tariffs

China’s Ministry of Commerce condemned the US tariffs, calling them an act of unilateral bullying that violates international trade norms. In retaliation, China has also added 11 American companies to its “unreliable entities” list, barring them from conducting business with Chinese firms.

Additionally, China has imposed strict export limits on critical rare earth elements such as gadolinium and yttrium, which are essential for industries like electric vehicles and military technology.

US tariffs and global economic impact

US President Donald Trump has announced a 54% tariff on Chinese imports, including previously imposed duties. Analysts predict this trade war will disrupt global markets, with JP Morgan increasing its global recession probability to 60% by 2025, up from 40% previously.

India’s potential trade advantage

With China facing tariffs as high as 65%, analysts believe Indian exporters could gain a competitive edge. The additional 27% tariff on India places it in a less affected category, creating opportunities in key sectors like engineering goods, electronics, gems and jewellery, textiles, and apparel.

To maximize this advantage, experts suggest India should:

• Negotiate with the US to maintain market access
• Work with FTA partners in Asia to restructure supply chains
• Expand beyond traditional exports into high-demand sectors

As trade tensions continue, India’s strategic positioning and proactive policy adjustments could help it emerge as a stronger global exporter.