China boosts tariffs to 84%, intensifying trade conflict with the US

April 09, 2025 (MLN): China again vowed to “fight to the end" Wednesday in an escalating trade war with the U.S. as it announced it would raise tariffs on American goods to 84% from Thursday.

The move comes as a direct retaliation to the US imposing its own tariffs on Chinese products, intensifying the ongoing trade war between the two economic giants.

The announcement of the new tariffs sent shockwaves through global markets.

US equity futures dropped more than 2% following the news, while stocks in Europe plunged by 4%.

Treasuries slid, pushing the 10-year yield to 4.4%, raising concerns about the safety of US sovereign bonds as a haven investment, as Bloomberg reported.

Oil prices also tumbled to about $55 a barrel, and the dollar weakened as uncertainty over the trade conflict grew.

"We're well into an escalation phase in the trade war and investors have just nothing to hold onto at the moment," said Alexandre Baradez, chief market analyst at IG Markets Ltd.

"What's clear now is that the US bond market is no longer a safe haven for investors, but on the contrary is piling pressure on stock markets."

The ripple effects of the market selloff spread globally, with the UK's borrowing costs soaring to their highest levels since 1998. Japanese 40-year bond yields also reached a record high.

Meanwhile, shares in major US and European pharmaceutical companies suffered, with Pfizer Inc., Eli Lilly & Co., and Merck & Co. each dropping more than 3% in premarket trading after President Trump hinted at a new US tariff on pharmaceuticals.

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