China declares economic war on the US as it restricts vital Rare Earths to US companies

New York: Global stock markets plunged for a second consecutive day on Friday following China’s announcement of retaliatory tariffs on US imports, further intensifying an a trade war initiated by US President Donald Trump. China imposed an additional 34% tariff on all American goods, with Beijing citing the US’s recent actions as a “unilateral bullying practice” that violates international trade rules.

China also announced restrictions on exports of rare earth materials crucial to tech manufacturing and blacklisted 16 more US companies. These moves follow Trump’s sweeping 10% tariffs on imports to the US, with additional levies targeting China.

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US stock futures fell sharply on the news, wiping out $2.4 trillion from US equity markets. In Europe, the FTSE 100 dropped over 300 points — its worst day since March 2023. Oil markets also felt the impact, with Brent crude prices falling 6.6% to $65.50, their lowest since August 2021. JP Morgan raised its global recession risk forecast to 60%, citing rising uncertainty.

Trump, commenting via Truth Social, declared, “CHINA PLAYED IT WRONG, THEY PANICKED.” Analysts warn of a prolonged “tit-for-tat” trade war, with significant implications for global commerce. China’s textile and e-commerce industries, particularly fast fashion giants like Temu and Shein, are expected to be hit hard. A loophole that previously allowed duty-free US shipments under $800 has been closed, with new fees starting May 2.

China has filed a complaint with the World Trade Organization and emphasized its willingness to cooperate under “mutual respect and win-win cooperation".