Signal China's 2025 retaliation escalates from measured tariffs to rare earth controls

Summary

China's response to Trump's 2025 tariffs followed an inverted-U pattern of initial restraint, simultaneous escalation and then mutual de-escalation. When Washington raised tariffs by 10 percent on February 1, China's tariff response was moderate, with 15 percent on US LNG and coal and 10 percent on oil, farm machinery and large cars, but non-tariff measures signalled readiness to escalate. After the US announced 34 percent reciprocal tariffs on April 2, the State Council matched the rate on all US imports two days later. Beijing also imposed strict export controls on seven rare earths, added 11 US firms to the unreliable entity list and named 16 US companies for export controls. When Washington moved to 145 percent, China raised its own tariffs to 125 percent and said it would ignore further rounds of the numbers game as economically meaningless.