China on Friday raised its tariffs on United States imports to 125 per cent from 84 per cent, in a sharp response to the latest round of reciprocal duties imposed by U.S. President Donald Trump, according to a statement by the Chinese finance ministry.
“Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the ministry said, as quoted in a CNBC translation.
The statement further asserted, “With tariff rates at the current level, there is no longer a market for U.S. goods imported into China,” adding that “if the U.S. government continues to increase tariffs on China, Beijing will ignore.”
This retaliatory move follows confirmation by the Trump administration on Thursday that the cumulative U.S. tariff rate on Chinese imports now totals 145 per cent. President Trump’s most recent executive order increased tariffs on Chinese goods to 125 per cent, on top of a 20 per cent fentanyl-related tariff that had been gradually imposed in February and March.
“This is the end of the escalation in terms of bilateral tariff rates. Both China and the US have sent clear messages, there is no point of raising tariffs further,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
Zhang added that the next phase would be to assess the damage already done to economic activities in both countries, noting that there is currently no indication of plans by either side to resume negotiations or avoid major disruptions to global supply chains.
Unlike in previous rounds of trade reprisals, China has so far avoided announcing additional export controls or expanding its “unreliable entity list,” which could impose further restrictions on U.S. firms operating within the country.
Still, in a separate statement, a spokesperson for China’s commerce ministry reiterated that Beijing remains open to negotiating with the United States “on an equal footing.”
However, recent developments have significantly dimmed hopes of a resolution. Over the past week, China has responded with tit-for-tat duties and broader restrictions targeting U.S. businesses.
“It’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” U.S. Treasury Secretary Scott Bessent said on Fox Business on Wednesday, following China’s initial tariff hike to 84%.
“They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them,” Bessent added.
In response to the worsening trade climate, Goldman Sachs on Thursday downgraded its projection for China’s GDP growth to four per cent, citing the negative effects of the ongoing trade tensions and broader global economic slowdown.
While exports to the U.S. contribute about three percentage points to China’s GDP, Goldman Sachs analysts warned that as many as 10 million to 20 million Chinese workers are directly employed in export industries that cater to the U.S., highlighting the potential domestic fallout.
China’s government, meanwhile, reaffirmed its tough stance. “China will continue to resolutely counter-attack and fight to the end” if the U.S. persists in infringing on its interests, the finance ministry declared.
During a meeting with Spanish Prime Minister Pedro Sánchez on Friday, Chinese President Xi Jinping emphasised the damaging nature of trade wars. “There is no winner in a tariff war and going against the world will only isolate itself,” Xi said, according to a government readout translated by CNBC. Both leaders agreed to deepen cooperation in trade, investment, and technological innovation.
