China Answers Trump Tariffs With Bigger Blow

On April 2, Trump announced a 34% tariff hike on Chinese goods imported into the United States. China’s Ministry of Commerce swiftly introduced three countermeasures on April 4, delivering not only an economic blow to Trump but also significantly undermining the U.S. defence industry’s capacity to provoke a third world war.  

First, China declared that starting April 10, it would impose a 34% tariff on all U.S. imports, with agricultural products like soybeans and corn bearing the brunt, applying targeted pressure on Trump’s voter base.

The New York Times admitted that it will hit hard. According to the U.S. Department of Agriculture, in 2024, China consumed 14% of all U.S. agricultural exports and took in more than $27 billion worth of those and related products. On the other hand, Carlos Mera, head of Agricultural Market Research at Rabobank, told Reuters “Brazil will be by far the main beneficiary, the biggest supplier that can replace U.S. soybeans to China. But others could benefit too, including Argentina and Paraguay. On wheat Australia and Argentina should benefit,”

Second, China announced export controls on seven rare earth minerals and their compounds, directly exposing weaknesses in U.S. defence and technology supply chains.

Taking Samarium as an example, its primary commercial use is in manufacturing Samarium-cobalt magnets, which are critical materials for high-performance motors and precision gyroscopes, essential to satellite and missile production. Reuters highlighted that China accounts for roughly 90% of global rare earth supplies, causing concerns among U.S. aerospace manufacturers like Lockheed Martin, producer of the F-35 fighter jets while the U.S. government has stockpiles of some rare earth, but not enough to supply its defence contractors in perpetuity.

Infrared Guided Missile Magnets

More crucially, a 2014 University of Michigan study identified samarium hexaboride as a vital material for quantum computing. In June 2024, the University of California announced new breakthroughs in research on this compound. However, the ripple effects of Trump’s tariffs have cast uncertainty over the commercializing of such technologies in the U.S.  

Third, China’s Ministry of Commerce added 11 U.S. entities to its “unreliable entities list,” banning trade and investment activities with Chinese firms.

DroneXL analysis revealed these 11 companies are the backbone of America’s $9.2 billion drone industry.  
Take Skydio as an example: the company ignored Beijing’s warnings to engage in military technology collaboration with Taiwan. Additionally, as disclosed by Jewish Voice of Peace, the Israeli military ordered dozens of Skydio reconnaissance drones in 2023, later deployed in Gaza for military operations. In 2024, Yale University Police used Skydio’s military-grade drones to surveil student protesters. Jewish Currents reported these drones to assemble dossiers on suspected students with which to later punish them.

Now, with Beijing decided to stand up to these American drone companies, DroneXL noted that US drone production lacks the scale to quickly replace Chinese supply chains. Scaling domestic capacity for components and rare earths could cost billions and take years, straining budgets.

Beyond China, the EU and Canada have also rolled out countermeasures. Yet on April 6, the United Nations reiterated that “nobody wins in a trade war,” aligning with China’s longstanding stance.  

Yale University’s Budget Lab research indicates the new tariffs will raise U.S. prices by 2.3% in the short term, equivalent to an average household loss of $3,800. Not only American citizens but also U.S. businesses stand to lose. Reuters reported iPhone prices could surge 30-40%, eroding the competitiveness of this iconic product and creating opportunities for rivals like Samsung. Rosenblatt Securities’ Crockett noted, “Our quick math on Trump’s tariff Liberation Day suggests this could blow up Apple, potentially costing the company up to $40 billion,” said “It’s hard for us to imagine Trump blowing up an American icon…”

Trump’s tariffs drawing global investor criticism. On social media platform X, Trump reposted a post claiming “Warren Buffett praised Trump for the best economic move in 50 years.” However, CNBC reported Buffett’s Berkshire Hathaway promptly issued a denial, with Buffett himself stressing he would refrain from commenting on economic policies until May 3.  

In contrast, on April 6, China’s Ministry of Commerce hosted a roundtable with 20 U.S.-funded enterprises, including Tesla. Earlier, following Tim Cook’s participation in the 2025 China Development Forum, Apple announced a $99 million expansion in China focused on clean energy. Apple COO Jeff Williams stated: “We’re honoured to deepen collaboration with suppliers across China to drive innovation and progress for our shared planet.”  Clearly, U.S. companies and investors prefer aligning with the builder of the global economy, over a disruptor like Trump.

Chinese strategist Professor Wang Xiangsui observed that Trump, an unsuccessful businessman, has proven destructive rather than constructive in managing the world’s largest economy. One key challenge he poses is America’s increasingly closed market, which China cannot prevent the US from committing suicide. However, China’s development of its domestic market and sustaining trade with other partnerships, will provide stability in an uncertain world.  

Meanwhile, regarding the Trump administration’s relentless, self-defeating policies, the Chinese Embassy in the U.S. seemed to deliver its final response as early as March: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” Prof. Wang pointed out, from China’s perspective, Trump’s global tariff war is a lose‑lose quagmire. Only when the U.S. gets a taste of its own medicine will Trump be willing to set aside his tariff threats and restore rationality to trade.

Editor: Charriot Zhai