U.S. Escalated Trade War and Slapped China With Additional 34% Tariffs

Li Chen
03 Apr, 2025
Hong Kong

Stock market indexes in China and Hong Kong declined sharply after the U.S. unveiled stiff tariffs targeting key trading partners. 

The Hang Seng index dropped 1.7% and the mainland-focused CSI index decreased 0.4% on the final trading day of this ahead of the public holiday on Friday. 

On the lawns of the the White House Donald Trump announced widely anticipated reciprocal tariffs of at least 10%, spanning imports from all countries. 

The Trump administration levied 34% tariffs on China-made goods, in addition to the previously announced 20% tariffs in February, totaling 54%.

The import tax is likely to dampen exports from China and Chinese goods made in Vietnam, Mexico and ASEAN region as the Trump administration ramps up pressure on key trading partners. 

The U.S. is hoping that steep tariffs will help it to lower its trade deficit, support domestic manufacturers, and encourage foreign makers to shift production to its shores and create jobs. 

However, similar moves by the first Trump administration failed to convince global manufacturing companies to increase their production in the U.S., and despite higher tariffs China's exports to the U.S. jumped by 50% over the four years to 2020.

About 15% of exports from China are sent to the U.S., and additional 10% of Chinese goods are shipped via third countries including Mexico and Vietnam.  

The Trump administration imposed 20% tariffs on goods shipped from the European Union, 24% on Japan, 25% on South Korea, 26% on India, and 32% on Taiwan. 

 

China Indexes and Stocks 

The Hang Seng Index declined 1.7% to 22,837.36 and the mainland-focused CSI Index fell 0.4% to 3,869.08. 

Techtronic Industries dropped 12% to HK $82.50, and the company exports about 76% of its sales to North America. 

Lenovo Group declined 7% to HK $9.89, and the company receives bulk of its revenue from the U.S. 

Alibaba Group Holding dropped 5% to HK $123.50, Tencent Holdings dropped 1.9% to HK $495.0, and JD.com Inc fell 5% to HK $153.70.  

Shenzhou International Group Holding plunged 14% to HK $53.10, and the Chinese apparel company relies on shipments to companies in the U.S. including Nike.