Beijing Responds Forcefully to Latest U.S. Increased Tariffs
In a dramatic escalation of trade tensions, China has increased tariffs on U.S. goods to 125% in response to former President Donald Trump’s move to raise duties on Chinese imports to 145%. Calling the American strategy “a joke,” China’s Finance Ministry condemned the unilateral imposition of excessive tariffs, saying it violated international trade norms and economic logic.
The tit-for-tat move marks the latest chapter in a renewed U.S.-China trade standoff, prompting concerns about the future of global trade stability.
Tariff Hikes Worsen U.S.-China Trade Relations
The Trump administration’s decision earlier this week to increased tariffs on Chinese goods while pausing duties on products from other nations triggered a swift and decisive response from Beijing. In a statement issued Friday, China’s Finance Ministry described the U.S. actions as “unilateral bullying and coercion.”
“Even if the U.S. continues to impose higher tariffs, it would no longer carry any economic significance and would go down as a joke in world economic history,” the Ministry stated. China added it would not respond to any further tariff hikes, signaling that economic retaliation may take new forms beyond import duties.
Impact on Trade Between World’s Two Largest Economies
Economists warn that tariff levels surpassing 35% typically eliminate any profit margins for exporters. With duties now as high as 125% in China and 145% in the U.S., experts say meaningful trade between the two nations has become economically unfeasible.
UBS analysts noted that with both countries now taxing virtually all of each other’s traded goods, the trade relationship is essentially severed. According to the Peterson Institute for International Economics, the average U.S. tariff on Chinese goods is now 135%—over 40 times higher than it was before the trade war began in 2018.
China Takes Broader Measures Beyond Tariffs
In addition to the tariff hikes, China has begun implementing broader retaliatory steps:
- Hollywood Import Restrictions: China announced immediate limits on the import of Hollywood films.
- Travel and Education Advisories: A travel alert was issued for Chinese citizens visiting the U.S., along with a warning for students considering studies in the state of Ohio.
These measures signal a shift in strategy, where Beijing appears to be targeting cultural and service-sector exports, which are less protected by tariffs.
China Declares This the Final Tariff Response
Despite the harsh rhetoric, Beijing made it clear that it does not intend to match any further tariff escalations from Washington.
This declaration marks a strategic pivot: rather than engaging in a continuous tit-for-tat battle, China appears to be signaling the limits of trade-based retaliation. However, it left the door open for alternative forms of reprisal.
“China will not respond to meaningless numbers games,” the Finance Ministry emphasized, but reiterated its readiness to “fight to the end” if the conflict broadens in scope.
Seeking Support from Global Partners
Facing rising trade isolation from the U.S., China is stepping up efforts to build alliances with other major economies. President Xi Jinping met with Spanish Prime Minister Pedro Sanchez in Beijing and called for stronger China-EU cooperation to oppose “unilateral acts of bullying.”
Xi will also embark on a tour of Southeast Asia next week, where he is expected to reinforce ties with Vietnam, Malaysia, and Cambodia. Analysts suggest China’s focus will likely be on securing agricultural trade agreements and promoting economic stability, rather than pursuing comprehensive free trade deals.
“Stability is China’s biggest offer to Vietnam,” said Eric Orlander, co-founder of the China-Global South Project, underscoring the strategic importance of consistent policy in an uncertain global climate.
Diplomatic Engagement and Possible EU Thaw
Chinese Commerce Minister Wang Wentao has been actively engaging with international counterparts, including those from the EU, Malaysia, Saudi Arabia, and South Africa. These talks are part of a broader strategy to rally support from ASEAN, the G20, and BRICS nations.
In a positive development, China and the European Union have agreed to resume talks on trade relief and to negotiate pricing terms on electric vehicles. The move may signal a truce in an ongoing dispute, allowing China to refocus its trade conflict solely on the United States.
Conclusion: Trade War Enters New Phase
As both the U.S. and China now levy tariffs on nearly 100% of each other’s goods, the trade war appears to have reached a critical breaking point. With Beijing opting out of further tariff escalations and looking to strengthen global alliances, the nature of the conflict may now shift from economic to diplomatic and geopolitical arenas.
“China remains open to negotiations with the U.S., but threatening and pressuring are not the right way to engage,” said China’s Commerce Ministry, leaving open the possibility of future dialogue—if conducted on more respectful terms.
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