China on Friday announced additional tariffs of 34% on U.S. goods, the most serious escalation in a trade war with President Donald Trump that has fed fears of a recession and triggered a global stock market rout.
In the standoff between the world's top two economies, Beijing also announced controls on exports of some rare earths and filed a complaint at the World Trade Organization (WTO) over the tariffs issue.
"The United States' imposition of so-called 'reciprocal tariffs' seriously violates WTO rules, seriously damages the legitimate rights and interests of WTO members, and seriously undermines the rules-based multilateral trading system and international economic and trade order," the Chinese Commerce Ministry said.
"It is a typical unilateral bullying practice that endangers the stability of the global economic and trade order. China firmly opposes this," it said.
Rare earths are materials used in high-tech products such as computer chips and electric vehicle batteries. Included in the list of minerals subject to controls was samarium and its compounds, which are used in aerospace manufacturing and the defense sector. Another element called gadolinium is used in MRI scans.
Beijing added 11 entities to the "unreliable entity" list, which allows it to take punitive actions against foreign entities, including firms linked to arms sales to Taiwan, which China claims as part of its territory.
China's customs administration said it had suspended imports of chicken from some U.S. suppliers after detecting furazolidone, a drug banned in China, in shipments from those companies.
Separately, it said it had found high levels of mold in the sorghum and salmonella in poultry meat from some of the companies. The announcements affect one company exporting sorghum, C&D Inc., and four poultry companies.
Additionally, the Chinese government said it had added 27 firms to lists of companies subject to trade sanctions or export controls.
Among them, 16 are subject to a ban on the export of "dual-use" goods. High Point Aerotechnologies, a defense tech company, and Universal Logistics Holding, a publicly traded transportation and logistics company, were among those listed.
Other actions include the launch of an anti-monopoly investigation into DuPont China Group Co., a subsidiary of the multinational chemical giant, and an anti-dumping probe into X-ray tubes and CT tubes for CT scanners imported from the U.S. and India.
Trump's "Liberation Day" set of tariffs announced on Wednesday included an additional 34% tax on China on top of the existing 20%.
In February, China announced a 15% tariff on imports of coal and liquefied natural gas products from the U.S. It separately added a 10% tariff on crude oil, agricultural machinery and large-engine cars.
Dozens of U.S. companies are subject to controls on trade and investment, while many more Chinese companies face similar limits on dealings with U.S. firms.
The latest tariffs apply to all products made in the U.S., according to a statement from the Ministry of Finance's State Council Tariff Commission.
Countries and industries were scrambling Friday to respond in a mounting trade war after Trump raised U.S. tariff barriers to their highest level in more than a century this week, leading to a plunge in world financial markets.
Investment bank JPMorgan said it now sees a 60% chance of the global economy entering recession by year-end, up from 40% previously.
U.S. stock futures fell sharply on Friday, signaling more losses on Wall Street, after China retaliated with fresh tariffs a day after the Trump administration's sweeping levies knocked off $2.4 trillion from U.S. equities.
"China comes out swinging with an aggressive response to Trump's tariffs," said Stephane Ekolo, market and equity strategist, Tradition, London.
"This is significant and is unlikely to be over, hence the negative market reactions. Investors are afraid of a 'tit for tat' trade war situation."
Shares of Big Tech stocks fell in premarket trading, with companies such as Apple and Nvidia having big exposure to China and Taiwan for manufacturing their products.
In Japan, one of the United States' top trading partners, Prime Minister Shigeru Ishiba said the tariffs had created a "national crisis" as a plunge in banking shares on Friday set Tokyo's stock market on course for its worst week in years.
U.S. Secretary of State Marco Rubio on Friday disputed any economic crash, telling reporters that markets were reacting to the change and would adjust.
"Their economies are not crashing. Their markets are reacting to a dramatic change in the global order in terms of trade," he said at a press conference in Brussels. "The markets will adjust."
With European shares also heading for the biggest weekly loss in three years, the European Union's Trade Commissioner Maros Sefcovic will speak to U.S. counterparts.
The European Union faces a 20% duty by the U.S.
"We will not shoot from the hip – we want to give negotiations every chance to succeed to find a fair deal, to the benefit of both sides," he said on social media.
The EU is divided on how best to respond to Trump's tariffs, including on use of its "Anti-Coercion Instrument," which allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies.
Countries that are cautious about retaliating and thereby raising the stakes in the standoff with the U.S. include Ireland, Italy, Poland and the Scandinavian nations.
French President Emmanuel Macron led the charge on Thursday by calling on companies to freeze investment in the U.S.
However, French Finance Minister Eric Lombard later cautioned against like-for-like countermeasures, warning this would also rebound on European consumers.
"We are working on a package of responses that can go well beyond tariffs, in order, once again, to bring the U.S. to the negotiating table and reach a fair agreement," Lombard said in an interview with broadcaster BFM TV.
There were conflicting messages from the White House about whether the tariffs were meant to be permanent or were a tactic to win concessions, with Trump saying they "give us great power to negotiate."
The U.S. tariffs could jack up the price for U.S. shoppers of everything from cannabis to running shoes to Apple's iPhone. A high-end iPhone could cost nearly $2,300 if Apple passes the costs on to consumers, based on projections from Rosenblatt Securities.
Businesses have raced to adjust. Automaker Stellantis said it would temporarily lay off U.S. workers and close plants in Canada and Mexico, while General Motors said it would increase U.S. production.
"Others have maybe learned their lessons (from Trump's last term)," said Eddie Kennedy, head of Bespoke Discretionary Fund Management, Marlborough, London.
"They are fighting back and saying we can play the same game as you and we are more in a position of strength to negotiate."
Other trading partners, including Japan, South Korea, Mexico and India, said they would hold off on any retaliation for now as they seek concessions. Britain's foreign minister said it was working to strike an economic deal with the U.S.
Trump says the "reciprocal" tariffs are a response to barriers put on U.S. goods, while administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, although they cautioned it would take time to see results.
