Business
China Imposes 125% Tariffs on U.S. Goods, Says Further Trump Levies ‘Economically Meaningless’
In a dramatic escalation of trade tensions, China announced Friday that it will raise tariffs on U.S. goods to 125%, signaling it will no longer respond to any further tariff hikes by President Donald Trump. Beijing cited the lack of economic viability in continuing to import U.S. products under current conditions.
The announcement followed a week of volatility in global markets, driven by tit-for-tat trade measures from the world’s two largest economies. China’s Ministry of Commerce dismissed Trump’s continued tariff threats as a “joke” and a mere “numbers game” devoid of real economic value.
Beijing placed the blame for the global trade turbulence squarely on Washington. “The United States should bear full responsibility for the market chaos triggered by its tariff spree,” a Chinese official stated.
President Trump has aggressively used tariffs as leverage in his broader strategy to pressure countries into lowering trade barriers and incentivizing manufacturers to return operations to the U.S. Despite initial bravado, he paused many tariffs for 90 days this week—though he raised China-specific tariffs to a staggering 145%.
China’s retaliatory 125% tariffs will take effect Saturday. However, in a notable shift, Beijing indicated it would not respond to any additional U.S. tariff increases, stating that such moves now “lack economic sense.”
“At this tariff level, the Chinese market has effectively shut its doors to American goods,” the finance ministry said. “Further U.S. actions will be ignored.”
Beijing also announced plans to challenge the latest U.S. tariffs at the World Trade Organization.
Trump’s Optimism vs. Global Reality
Despite mounting global concern, President Trump remained upbeat, brushing aside fears of economic fallout. “In the end, it’s going to be a beautiful thing,” he said, defending his aggressive trade policies. He praised the European Union for holding back on retaliatory tariffs, though EU leaders signaled they were preparing countermeasures if talks with Washington falter.
European Commission President Ursula von der Leyen hinted at a possible digital services tax as one such option, while French President Emmanuel Macron urged the EU to stay prepared to act if necessary. Chinese President Xi Jinping also weighed in, calling on Europe to join China in resisting “unilateral bullying practices” and defending global trade norms.
Markets React
The financial fallout was swift. Wall Street suffered new losses, and Asian markets followed suit. Tokyo dropped over four percent after a volatile trading week, while markets in Sydney, Seoul, and Singapore also slid. In Europe, stocks fell as investors reacted to China’s retaliatory move.
Oil and the U.S. dollar declined amid growing fears of a global economic slowdown. Meanwhile, gold surged past $3,200 per ounce, as anxious investors ditched U.S. Treasury bonds.
“The sugar high from Trump’s tariff pause is fading fast,” said Stephen Innes of SPI Asset Management. “The bottom line is that the world’s two largest economies are now locked in a full-scale trade war—and there are no winners.”
Economic Uncertainty, Political Maneuvering
Critics argue that Trump’s tariff strategy is backfiring—disrupting supply chains, alienating allies, and increasing prices for American consumers. Still, some administration voices remain optimistic. Commerce Secretary Howard Lutnick declared on social media that “the Golden Age is coming,” citing ongoing negotiations and efforts to spur economic growth.
Trump hinted that the tariffs could return in full force after the 90-day pause if a favorable deal isn’t reached. “If we can’t make the deal we want… then we’ll go back to where we were,” he warned.
Meanwhile, Canada, Vietnam, and Pakistan have initiated or planned trade talks with the U.S., hoping to stabilize relations. President Xi is expected to travel next week to Vietnam, Malaysia, and Cambodia, where countering Trump’s tariff pressure will likely dominate discussions.