Tit-for-Tat: 145% US Tariffs Met with 125% Chinese Retaliation

By Casey M. Blake

Cover Image Attribute: Pixabay.com

The escalating trade war between the United States and China reached a new peak on April 11, 2025, as Beijing announced a sharp increase in tariffs on all US goods, raising duties from 84% to 125% effective April 12. This move came in direct response to President Donald Trump’s decision earlier in the week to elevate tariffs on Chinese imports to 145%, intensifying a tit-for-tat that has gripped global markets and heightened economic uncertainty. The Chinese Ministry of Finance described the US actions as a “numbers game with no practical significance in economics,” signaling Beijing’s growing frustration with the ongoing trade dispute. A spokesperson for the ministry went further, asserting that “if the US continues to play the tariff numbers game, China will ignore it,” suggesting that China believes further escalation would render US goods uncompetitive in its market due to prohibitively high costs.
The roots of this latest skirmish trace back to earlier actions this week, when Trump imposed a 104% tariff on Chinese imports, prompting China to retaliate by increasing its duties on US goods from 34% to 84% starting Thursday. The rapid succession of tariff hikes underscores the deepening rift between the world’s two largest economies, with both sides appearing entrenched in their positions. Beijing’s latest tariff increase was accompanied by pointed rhetoric, with the Chinese finance ministry stating that “at the current tariff level, there is no possibility of market acceptance for US goods exported to China.” This sentiment reflects China’s calculation that the US market can no longer absorb the economic fallout of such high levies, a view echoed by a Commerce Ministry spokesperson who claimed that Washington’s policies have caused “the current world economy, global markets and multilateral trading systems to suffer serious shocks and severe turbulence.”
The global repercussions of this trade war are becoming increasingly evident. In the United States, fresh signs of economic strain emerged on Friday, with a closely watched survey revealing consumer sentiment plummeting to one of the lowest levels in a decade. Respondents expressed growing fears of recession and anticipated prices to surge by 6.7% in the coming year, a level of pessimism about inflation not seen since the early 1980s. Prominent financial leaders have also sounded alarms. JPMorgan’s Jamie Dimon warned that the economy “is facing considerable turbulence,” despite his bank reporting strong quarterly results driven by high trading volumes. Similarly, BlackRock’s Larry Fink highlighted “uncertainty and anxiety about markets and the economy” among clients, drawing comparisons to the financial crisis and the pandemic. These concerns were reflected in market movements, as major US stock indexes fell 6% to 7% since Trump announced his tariff plan on Wednesday, while the US dollar weakened for a fifth consecutive day, marking its worst week since 2022.
China’s response to the trade war extends beyond tariffs. On Friday, President Xi Jinping met with Spanish Prime Minister Pedro Sanchez in Beijing, where he emphasized that “there are no winners” in tariff wars. Xi urged the European Union to collaborate with China to counter what he described as “unilateral bullying” by the US, arguing that such cooperation would “safeguard legitimate rights and interests” and uphold “international fairness and justice.” This appeal to Europe reflects Beijing’s broader strategy to rally international support against Trump’s trade policies, particularly as the US has partially exempted other countries from its tariffs. On Wednesday, Trump announced a 90-day pause on sweeping tariffs for all nations except China, citing a “lack of respect” from Beijing. China, however, claimed that this decision was influenced by “pressure from China,” a assertion that underscores the high-stakes diplomatic maneuvering accompanying the economic conflict.
The trade war’s impact is not confined to US-China relations. Canada’s Prime Minister Mark Carney announced plans to counter “unjustified” US tariffs of 25% on steel, aluminum, and cars, vowing to inflict “maximum pain” in retaliation. In Europe, French President Emmanuel Macron described the partial suspension of US tariffs as “fragile,” urging the EU to prepare countermeasures. EU trade chief Maroš Šefčovič is scheduled to meet US officials in Washington on Monday to address these concerns, signaling ongoing efforts to navigate the turbulent trade landscape. Meanwhile, global markets have reacted with volatility. Gold prices soared to record highs amid fears of geopolitical conflict, while Japan’s Nikkei 225 index dropped 3% to close the week. In contrast, Europe’s Stoxx 600 index edged higher, suggesting a mixed response to the unfolding crisis.
Despite the escalating tensions, Trump has expressed optimism about reaching a resolution. Speaking at the White House earlier this week, he described Xi as a “very smart man” who “knows exactly what needs to be done” and expressed confidence that a deal would materialize. “I think he’s going to want to make a deal. I think that’s going to happen. We’ll get a phone call at some point, and everything will be ready,” Trump said, adding that such an agreement would be “a great thing for us, the world and for humanity.” However, China’s latest actions and rhetoric suggest a hardening stance. Beijing has accused the US of bearing “full responsibility” for the global economic “turbulence” triggered by Trump’s tariffs, with one official dismissing further US levy increases as a “joke” that would be “economically meaningless” and remembered as a historical misstep.
As the trade war intensifies, its ripple effects are reshaping economic and geopolitical dynamics. The US bond market faced pressure on Friday, with 10-year Treasury yields climbing above 4.5%, while the euro surged against the weakening dollar. In the US, the Dow, S&P 500, and Nasdaq Composite remained subdued, reflecting investor caution. China’s decision to raise tariffs to 125% and its refusal to match future US increases signal a potential shift in strategy, prioritizing economic self-preservation over reciprocal escalation. For now, the prospect of a negotiated resolution remains uncertain, with both nations locked in a high-stakes standoff that continues to rattle global markets and fuel economic anxiety.

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