Bitcoin price today: up to $109k but tariff woes, Trump’s new deadline limit gains
Investing.com-- China is likely to take more substantial measures in response to the latest U.S. tariffs, Citi analysts said in a note, highlighting the escalating trade tensions between the two countries.
The U.S. has imposed reciprocal tariffs on China with the total effective tariff rate now reaching approximately 65%, Citi analysts noted.
This includes a 34% reciprocal tariff, a 20% fentanyl-related tariff, and the continuation of Section 301 tariffs, which had an effective rate of around 11% as of late 2024. Additionally, the exemption for de minimis imports, which allowed duty-free entry for goods valued under $800, is set to end on May 2.
Citi analysts described the tariff level as "almost prohibitive" for U.S.-China trade, estimating that the economic impact of the 54% tariff hike alone—excluding any offsetting measures—could reduce China’s GDP growth by 2.4 percentage points and exports by 15.4 percentage points.
In response, China could consider a range of countermeasures, including imposing selective or broad-based tariffs on U.S. goods, introducing export controls on critical minerals, adding U.S. firms to its sanction list, or exerting regulatory pressure on American multinational corporations operating in China, according to Citi.
Citi analysts warned that the tariff escalation is unlikely to improve U.S.-China negotiations, with China’s foreign minister previously stating that the U.S. should lift fentanyl tariffs if it is serious about addressing drug-related issues.