China Retaliates With Massive 84% Tariff On US Goods Amid Escalating Trade War - Baidu (NASDAQ:BIDU), Li Auto (NASDAQ:LI)

Xi Jinping‘s China has unveiled a significant hike in retaliatory tariffs on U.S. products, intensifying the ongoing trade war between the world’s two biggest economies.

What Happened: On Wednesday, China declared that it will raise its reciprocal tariffs on U.S. goods to 84% from the previous 34% from April 10, reported the South China Morning Post.

This move comes in the wake of an intensifying trade conflict between the U.S. and China. This comes after the latest U.S. tariff hike — which brings levies on Chinese goods to more than 100% — took effect at the start of April 9.

In response to the new U.S. tariffs, the Ministry of Commerce not only filed a complaint with the World Trade Organization but also added six American companies to its unreliable-entity list. Additionally, it imposed export controls on 12 U.S. firms, prohibiting Chinese companies from supplying them with dual-use items—products that can serve both civilian and military purposes.

"China will firmly defend its interests, multilateral trade system and international economic order," stated the Chinese finance ministry online.

Why It Matters: This announcement comes on the heels of President Donald Trump‘s 104% tariff on Chinese imports, which sent stock futures plunging and major indexes to significant lows.

Despite the escalating trade war, many U.S. companies have chosen to stick with their operations in China, viewing it as a strategic value. A report commissioned by the U.S. Chamber of Commerce Foundation revealed that a majority of surveyed firms still see value in maintaining or expanding their presence in China, even as they increasingly view it as their biggest geopolitical risk.

This escalating trade conflict is likely to have far-reaching implications on the global economy, and all eyes are on how this situation will unfold in the coming days.

During the U.S. premarket session, U.S.-listed Chinese stocks traded mixed. Baidu Inc. BIDU and Nio Inc. NIO were in the red, while Xpeng Inc. XPEV and Li Auto Inc. LI saw modest gains.