On Friday, China announced that it will raise tariffs on U.S. goods from 84% to 125%. This move is the latest in the ongoing trade war between the two largest economies in the world, shaking up markets and fueling concerns of a global economic slowdown.
While President Donald Trump paused import taxes for other countries this week, he increased tariffs on China, bringing them to a total of 145%. China condemned this move as “economic bullying” and promised to retaliate. The new tariffs are set to begin on Saturday.
A Chinese Finance Ministry spokesman said, “Washington’s repeated raising of tariffs will become a joke in the history of the world economy.” He added, “However, if the U.S. insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”
The Chinese Commerce Ministry announced it would file another lawsuit against the U.S. at the World Trade Organization.
Chinese President Xi Jinping said during a meeting with Spain’s Prime Minister Pedro Sanchez, “There are no winners in a tariff war.” He explained that for more than 70 years, China has relied on its own efforts and never on favors from others, and that China is not afraid of unreasonable suppression.
Chinese Foreign Minister Wang Yi said on Friday that China is standing firm against Trump’s tariffs not only to protect its own interests but also to defend the interests of the international community. He emphasized that China is working with other countries to resist actions that set the world back into a place where power rules over fairness.
Trump’s shifting tariffs have raised concerns in stock and bond markets, with some predicting a potential recession in the U.S. There was some relief when Trump paused the tariffs for most countries, but fears persist since the U.S. and China are the two largest economies globally.
Jennifer Lee, a senior economist at BMO Capital Markets, wrote on Friday, “The risk that this escalating trade war tips the world into a recession is rising as the two largest and most powerful countries in the world continue to punch back with higher and higher tariffs. No one truly knows when this will end.”
A sign is displayed outside the Bank of ChinaThe new Chinese tariffs will impact major U.S. exports like soybeans, aircraft parts, and drugs. In return, Beijing suspended imports of sorghum, poultry, and bonemeal from some American companies last week and increased export controls on rare earth minerals used in various technologies.
On the other hand, the U.S. imports electronics, industrial equipment, and toys from China, and consumers and businesses are expected to see higher prices due to the new 145% tariffs.
Trump had announced earlier this week that China would face 125% tariffs but did not include a 20% tariff linked to China’s involvement in fentanyl production.
White House officials hope that these tariffs will encourage companies to bring manufacturing back to the U.S., creating jobs. However, this goal is politically risky and could take years to achieve, if it happens at all.
