China Strikes Back with 125% Tariff on U.S. Goods, Escalating Global Trade War
- China raises tariffs on U.S. imports to 125% starting Saturday, up from 84%
- U.S. confirms its own duties on Chinese goods have surged to 145%
- Markets rattled despite 90-day pause on broader “Liberation Day” tariffs
- China signals end to further hikes, but tensions remain high
BEIJING/WASHINGTON, April 11 — The U.S.-China trade war escalated sharply on Friday as Beijing retaliated against President Donald Trump’s aggressive tariff regime, announcing that tariffs on U.S. goods would jump to 125% beginning Saturday. This marks a significant rise from the previous 84% and threatens to further destabilize global markets already on edge.
The move comes just one day after the White House clarified that U.S. tariffs on Chinese imports now stand at a staggering 145%, surpassing even President Trump’s initial announcement. While Trump has instituted a 90-day pause on certain sweeping “Liberation Day” tariffs, China’s counteraction indicates Beijing is not backing down.
Escalating Trade War Jolts Global Markets
This latest chapter in the escalating trade war between the world’s two largest economies has sent shockwaves through global financial markets. U.S. stocks have faced renewed volatility, with investor sentiment deteriorating amid mounting uncertainty.
Although Beijing indicated that no further tariff hikes (above 125% tariff) are currently planned, analysts warn that the geopolitical and economic standoff is far from resolved.
“This is a clear message that China is drawing a red line, but markets remain unconvinced that this is the end of the road,” said Mei Lin, an Asia-Pacific economist at Vanguard Strategies.
White House Reassures Amid Rising Tensions
As pressure mounted, the Trump administration sought to calm investors, with Treasury Secretary Scott Bessent stating that the U.S. would “arrive at a place of great certainty” following the 90-day tariff pause. He emphasized the administration’s intent to forge new trade agreements that prioritize U.S. interests while managing tensions with long-standing partners.
Despite Bessent’s optimism, the baseline 10% tariff implemented on April 5 remains in place for all applicable imports, continuing to add friction to global supply chains.
USMCA Stays Intact, but With Exceptions
Meanwhile, under the United States–Mexico–Canada Agreement (USMCA), goods that meet compliance standards continue to enter tariff-free. However, non-compliant imports now face a 25% tariff, with exceptions made for energy products and potash, which are taxed at 10%.
This steady bifurcation of tariff regimes is forcing multinational corporations to rethink sourcing strategies and reconsider investments tied to cross-border trade.
What’s Next?
China’s calibrated response — a dramatic hike followed by a signal to pause — indicates that Beijing is attempting to avoid full-blown economic decoupling, even as it resists being perceived as yielding to U.S. pressure.
Meanwhile, investors and policymakers alike are bracing for more volatility. Currency markets are already reacting, with the dollar weakening and haven assets like gold and the Swiss franc rising amid the turbulence.
As both superpowers dig in, the long-term implications for global trade architecture, inflation dynamics, and geopolitical alignment continue to unfold.
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