China has announced the imposition of 34% tariffs on all US imports starting 10 April, a direct retaliation to US President Donald Trump’s latest escalation in the trade war. The decision marks a critical turning point in economic relations between the world’s two largest economies and could reshape global energy trade, particularly in renewable energy and liquefied natural gas (LNG).

On 2 April, Trump introduced a new 34% tariff on all Chinese products, raising total tariffs on Chinese goods to over 54%. The White House justified the measure as essential to stop fentanyl imports and to “rebuild American industry.”

China’s State Council Tariff Commission responded firmly, stating that the US action constitutes “a typical unilateral bullying practice” and “seriously undermines China’s legitimate rights under international trade rules.”

The most sensitive blow lands in the energy sector. According to analyst Francesco Sassi, Research Fellow in Energy Geopolitics and Markets, the inclusion of crude and LNG in the tariff package could effectively end all bilateral energy trade:

“The new barriers are likely to halt any energy commerce between the two world powers,” Sassi warns.

In addition, China imposed export controls on seven rare-earth elements critical for the energy transition — such as samarium, gadolinium, and terbium — and blacklisted 11 US firms, including drone manufacturers and clean tech suppliers.

Direct consequences for renewable energy

These moves have immediate consequences for clean energy supply chains. From solar panels to wind turbines, many US-manufactured products rely on rare-earth imports and electronic components from China. The dual tariff barriers are set to sharply raise costs or completely disrupt access to these resources.

“Global energy insecurity is spreading rapidly,” Sassi highlights, noting that this latest wave of trade retaliation is amplifying stress on an already fragile market disrupted by previous geopolitical crises.

Market crash and fears of recession

Markets reacted sharply. The Dow Jones dropped over 1,000 points (2.7%), while the S&P 500 fell by 3%, and the Nasdaq dropped 3.5%, marking the worst performance in five years. US Secretary of State Marco Rubio acknowledged that “markets are crashing,” though he insisted they “will adjust once rules are clear.”

The key concern is that a prolonged trade war could tip both the US and the global economy into recession. Analyst Craig Singleton of the Foundation for Defense of Democracies explains:

“China is no longer nibbling at the edges — it is mirroring the US head-on. This is a strategic recalibration.”

China doubles down amid economic slowdown

Beijing’s move comes at a delicate moment. China aims to grow its economy by around 5% in 2025, but rising global tensions add pressure. According to Larry Hu, Chief China Economist at Macquarie Group, Trump’s tariff hikes could shave off up to 2.5 percentage points from GDP growth:

“The impact may unfold through reduced US demand, slower global trade, and difficulties rerouting exports,” Hu writes.

Export rerouting — a strategy used in Trump’s first term to bypass tariffs — involved redirecting goods via Southeast Asia and Latin America. However, with China now opting for direct confrontation, its flexibility is limited.

Energy geopolitics under threat

This confrontation is already undermining the architecture of global energy trade, impacting not only the US and China but also allied nations. The EU and the UK are already considering countermeasures to protect their renewables sectors from disruption.

LNG, once seen as a key pillar of European energy security post-Ukraine, may lose strategic value in Asia. Prolonged tariffs could reduce US export viability and hinder flexible LNG trading across the Atlantic and Pacific markets.

The latest US–China tariff battle goes far beyond trade skirmishes. It now strikes at the core of global energy transition strategies, threatening the flow of clean technologies, critical materials, and geopolitical cooperation. Renewables, far from being insulated, are now at the centre of this global conflict.