In a dramatic escalation of the ongoing trade conflict, China announced on Friday that it would raise tariffs on U.S. goods to 125%, declaring it would ignore any further levies imposed by President Donald Trump, citing the lack of economic rationale for continuing trade at such high costs.
Beijing’s retaliatory move follows a turbulent week in global markets, triggered by tit-for-tat trade barriers between the world’s two largest economies. The Chinese finance ministry stated that at the current tariff level, U.S. exports to China were no longer viable, rendering further U.S. hikes irrelevant.
“The United States’ imposition of round upon round of abnormally high tariffs on China has become a numbers game with no practical significance in economics,” said a spokesperson from China’s commerce ministry.
President Trump had earlier raised tariffs on Chinese goods to a staggering 145%, while temporarily pausing other levies for 90 days. Despite acknowledging the “transition costs” and global market disruptions caused by his aggressive tariff strategy, Trump insisted it would ultimately be “a beautiful thing.”
In response, China confirmed it would file a formal complaint with the World Trade Organization (WTO), asserting that the U.S. bears full responsibility for the current market volatility.
Global financial markets reacted sharply. Wall Street saw new declines, and Asian markets tumbled, with Tokyo dropping more than four percent. European indices also slid following Beijing’s announcement. Oil prices and the U.S. dollar dipped, while gold surged past $3,200 amid investor uncertainty.
European Union leaders expressed cautious support for countermeasures. French President Emmanuel Macron and EU Commission President Ursula von der Leyen indicated that Europe must remain ready to respond if talks with Washington falter.
Meanwhile, Chinese President Xi Jinping called on the EU to unite with China against what he termed “unilateral bullying practices” by the U.S., urging collaboration to defend international trade norms and fairness.
Despite widespread criticism from economists and businesses over the disruption to global supply chains and rising consumer costs, Trump’s commerce secretary, Howard Lutnick, hailed the administration’s economic strategy, proclaiming on social media, “The Golden Age is coming.”
While Trump has temporarily eased some tariffs, he warned that they could be reinstated if trade negotiations fail. Canada, Vietnam, and Pakistan have each signaled readiness to begin or resume trade talks with the U.S., hoping to ease tensions.
President Xi is set to visit Vietnam, Malaysia, and Cambodia next week, with the trade war expected to dominate diplomatic discussions.
