China Raises US Tariffs in Latest Escalation

Business Insider
China just poured more fuel on the trade war fire and called the US a 'joke'
Will Martin,Nora Redmond
Fri, April 11, 2025 at 7:35 AM EDT·

China hit the US with a 125% tariff on imports on Friday.

The move is the latest in a series of tit-for-tat tariff increases.

China accused the US of "bullying" and said it is becoming a "joke" on the world stage.

China hit back at the US with a 125% tariff on imports, the latest escalation in the trade war between the two superpowers sparked by President Donald Trump's trade tariffs.

In a fiery statement published on Friday, China's finance ministry accused the US of "bullying" and said it risked becoming a "joke" on the world stage.

"The US's arbitrary imposition of abnormally high tariffs on China seriously violates international economic and trade rules, disregards the post-World War II global economic order built by the US itself, and violates basic economic laws and common sense. It is completely unilateral bullying and coercion," the statement said.


"Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of the world economy."

The new tariffs will come into effect on Saturday, the ministry said. It added that it would not reciprocate with further tariff increases should the US retaliate again.

"If the US continues to play the tariff numbers game, China will ignore it," the statement said.

Previously, China had said the tariff rate on US imports would be 84%, a level imposed on Wednesday.

On Thursday, Trump's White House clarified that the combined tariff rate being imposed on China was 145%, not the 125% that had previously been reported.

President Donald Trump holding up a chart during a trade announcement event in the Rose Garden at the White House on Wednesday.
The White House clarified that the combined tariff rate imposed on China was 145%, not 125%.Chip Somodevilla/Getty Images
Neither are showing signs of backing down
Analysts at Deutsche Bank wrote in a note on Friday that the difference between the two figures is "negligible in any practical economic sense. " However, they outlined that the markets reacted to an increased decoupling of two of the world's largest economies.


"Neither the US nor China are showing signs of backing down, with President Trump expressing confidence in his tariff plans yesterday, even as he acknowledged potential 'transition problems,'" the analysts said.

Earlier in the week, Trump announced that he would pause a large swathe of his tariffs for 90 days, though many — including tariffs on China — remained in effect.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said on Friday that the president's willingness to change his stance on tariffs in response to equity and bond market turmoil shows some sensitivity to market turbulence.

"To be sure, the significant tariffs on China will cause economic disruption if they remain in place," he said. "But while downside risks do remain, we believe the risk of a more severe economic downturn is now more limited."

"At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable," Trump wrote on Truth Social on Wednesday.

Stock markets stutter
The Trump administration estimated the US running a trade deficit of $295 billion with China in 2024, with the US importing $440 billion of goods from China and China importing $145 billion of goods from America.


China's announcement of fresh retaliatory tariffs had a mixed impact on European stocks on Friday, though the impact was less significant than moves earlier in the week.

Germany's DAX was down 1.5% by around 1:30 p.m. local time (7:30 a.m. ET), while Britain's FTSE 100 was up around 0.4%. Europe's broad Stoxx 600 fell 0.6%.

US futures were trading a little higher, with the Dow, S&P 500, and Nasdaq all set to open up by around 0.2%

Japan's Nikkei 225 tumbled almost 3% by the end of the trading day, and South Korea's Kospi lost 0.5%.

"Both China and the US have sent clear messages, there is no point of raising tariffs further," Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note on Thursday.

"The next stage is to observe and evaluate the damage to economic activities in the US and China."

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Investopedia
China Raises US Tariffs to 125% in Latest Escalation of Trade War
Nisha Gopalan
Fri, April 11, 2025 at 6:28 AM EDT·


KEY TAKEAWAYS

Global stocks are volatile after China hiked its retaliatory tariffs on U.S. imports to 125%, with investors bracing for an escalating trade war.

Beijing raised its levy on U.S. imports from 84% on Friday, two days after President Donald Trump said China would be excluded from his 90-day pause on tariffs.

US stock futures are edging higher after whipsawing between gains and losses, while the dollar is plunging against major currencies.




Global stocks are volatile after China hiked its retaliatory tariffs on U.S. imports to 125%, with investors bracing for an escalating trade war.


Beijing raised its levy on U.S. imports from 84% on Friday, two days after President Donald Trump said China would be excluded from his 90-day pause on tariffs. A 10% base rate remains in effect for all countries, while China now faces an overall 145% levy.

"At the current tariff level, there is no market acceptance for US goods exported to China," China's State Council Tariff Commission said. "If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it."

"Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy," the commission added.

U.S. stock futures are edging higher, having whipsawed between gains and losses after indexes sank Thursday. Dow Jones Industrial Average, S&P 500, and Nasdaq futures are all up less than 1%. The Stoxx Europe 600 index is edging lower. Asian shares closed before China's latest move, with Japan's Nikkei ending down 3% and Hong Kong's Hang Seng up 1.1%.

Meanwhile, the dollar is plunging against most major currencies and the 10-year Treasury yield is down below 4.40%.

UPDATE—April 11, 2025: This article has been updated to include an additional quote.


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