Trump's 'Liberation Day' Tariffs and China-US Rivalry

The 2 April 2025 announcement triggered a geopolitical firestorm, significantly straining US relations with both allies and rivals.

- B.R. DEEPAK

Fulfilling a key campaign promise to impose "reciprocal" tariffs, President Donald Trump on "Liberation Day" (2 April 2025) announced sweeping tariff measures against nearly all major trading partners. These included a 34% tariff on imports from China, 20% on the European Union, and 26% on India.

The announcement triggered a bloodbath in global markets, sparking fears of an impending economic apocalypse. Over $10 trillion was wiped off major stock markets worldwide, with the United States bearing the heaviest losses. America's tech giants—collectively known as the "Magnificent Seven" (Apple, Google, Nvidia, Meta, Amazon, Microsoft, and Tesla)—were hit hardest by the shockwaves.

The 2 April 2025 announcement triggered a geopolitical firestorm, significantly straining US relations with both allies and rivals—what many now call "Global Trade War 2.0." European Commission President Ursula von der Leyen, in a call with Chinese Premier Li Qiang, emphasized the shared responsibility of Europe and China to uphold a reformed, fair, and rules-based trading system. India and Japan avoided immediate escalation, preferring quiet diplomacy, while the UK expressed disappointment. Across the Global South, the move was seen as further evidence of growing American unilateralism and protectionism.

China was the only nation to respond defiantly. Already facing tariffs exceeding 20%, the new measures raised the total US tariff rate on Chinese goods to 54%. In response, China vowed "countermeasures" to defend its "legitimate rights and interests," according to a CGTN analysis. The US also revoked the de minimis exemption for Chinese packages under $800, citing fentanyl concerns.

On 3 April, Beijing retaliated with a 34% tariff on US goods, WTO legal action, and sanctions against several American entities.