Tariff showdown: China retaliates, slaps US imports with 125% duties
5 Min Read
Blaming Washington for global market instability, China declared that the US “should bear full responsibility” for the resulting chaos.
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Chinese President Xi Jinping holds an umbrella outside a restaurant Tuesday, May 7, 2024, at the Tourmalet Pass, in the Pyrenees mountains (AP)
China announced Friday that it will raise tariffs on US goods to 125% but signaled it would no longer respond to any additional US levies, arguing that purchasing American products no longer makes economic sense under the current conditions.
In a related development, Chinese Foreign Minister Wang Yi criticized the United States’ tariff policy during a meeting in Beijing with Rafael Mariano Grossi, Director General of the Internation7al Atomic Energy Agency, stating that “the US cannot act recklessly,” and emphasized that “the wheel of history cannot go backwards.”
After a volatile week of escalating tariffs between the world’s two largest economies, Beijing shrugged off President Donald Trump's latest pressure tactics, calling the mounting tariffs a "joke" and a "numbers game".
Blaming Washington for global market instability, China declared that the US “should bear full responsibility” for the resulting chaos. Trump's aggressive tariff strategy—designed to pressure countries and manufacturers to move operations to the US—was met this week with significant market disruption. Despite his hardline rhetoric, Trump eventually froze many tariffs for 90 days while increasing duties on Chinese imports to a steep 145%.
China’s Finance Ministry responded by announcing its own hike to 125% starting Saturday but added that further American actions would be disregarded. “At the current tariff level, there is no possibility of market acceptance for US goods exported to China,” the Ministry stated. A spokesperson from Beijing’s commerce ministry said, “If the US continues to play the tariff numbers game, China will ignore it.”
China’s mission to the World Trade Organization also announced Friday that it had submitted an additional complaint to the WTO in response to the latest US tariff hike.
"On 10 April, the United States issued the Executive Order, announcing a further increase of the so-called 'reciprocal tariff' on Chinese products," the mission said in a statement, quoting a spokesperson from the Ministry of Commerce. "China filed a WTO complaint against United States’ latest tariff measures," it added.
Wider context
President Trump acknowledged the short-term disruption caused by his policies, saying, “a transition cost and transition problems” were inevitable, but insisted on their long-term value. “In the end it’s going to be a beautiful thing,” he said.
He commended the European Union for holding off on retaliatory tariffs, claiming, “(The EU) were ready to announce retaliation. And then they heard about what we did with respect to China.”
However, European Commission President Ursula von der Leyen told the Financial Times that the EU still holds “a wide range of countermeasures” in reserve. “An example is you could put a levy on the advertising revenues of digital services,” she explained.
French President Emmanuel Macron echoed this sentiment, urging the EU to continue preparing a response to Trump’s tariffs. “Europe must continue to work on all the necessary counter-measures,” Macron said on X.
During a meeting with Spanish Prime Minister Pedro Sanchez, Chinese President Xi Jinping stated that China and the EU should align their efforts. “China and Europe should fulfil their international responsibilities... and jointly resist unilateral bullying practices,” Xi said, adding that such cooperation would help “safeguard international fairness and justice.”
Markets tumble again amid trade war escalation
After a brief rally, global markets resumed their slide. Tokyo dropped more than four percent, and other major markets in Sydney, Seoul, and Singapore also dipped. European stocks followed suit in response to China’s retaliatory measures.
Amid fears of a global slowdown, oil prices and the US dollar weakened, while gold soared past $3,200—an all-time high. US Treasuries, normally a safe haven, were sold off as investors grew wary of Trump’s unpredictability.
“The sugar high from Trump’s tariff pause is fading fast,” said Stephen Innes of SPI Asset Management. “Bottom line: the world’s two largest economies are in a full-blown trade war—and there are no winners.”
Critics slam Trump’s trade strategy
Trump’s approach has drawn fire from economists and business leaders who argue that it’s upending global supply chains, straining relationships with allies, and raising prices for American consumers.
Nevertheless, Commerce Secretary Howard Lutnick wrote online, “The Golden Age is coming. We are committed to protecting our interests, engaging in global negotiations and exploding our economy.”
Trump warned that if negotiations don't go his way during the 90-day pause, tariffs could be reinstated. “If we can't make the deal we want to make... then we'd go back to where we were,” he said.
Other countries have begun preparing for talks. Canadian Prime Minister Mark Carney called Trump’s tariff freeze a “welcome reprieve” and said Ottawa would begin negotiations following its April 28 elections. Vietnam has agreed to start trade discussions with the US, and Pakistan will soon send a delegation to Washington.
Meanwhile, President Xi is set to visit Vietnam, Malaysia, and Cambodia next week, with the ongoing tariff tensions expected to dominate the agenda.
Read more: China to reduce US film imports over tariff hikes
