China slaps 125% tariffs on US goods in escalating trade war

[WORLD] China will levy 125% tariffs on US goods beginning April 12, up from 84% previously promised, the finance ministry stated on April 11. The ministry stated in a statement that if the US continues to put higher tariffs on Chinese commodities exported to the US, China would ignore them since US goods will no longer make economic sense for importers.

The latest escalation marks a significant hardening of China’s stance in the ongoing trade dispute, which has seen both nations engage in tit-for-tat measures since 2018. Analysts warn that the higher tariffs could disrupt global supply chains, particularly in sectors like agriculture, automotive, and technology, where bilateral trade remains heavily intertwined. The move also raises concerns about inflationary pressures, as higher costs may eventually trickle down to consumers in both economies.

The increase comes after the White House maintained pressure on China, the world's second-largest economy and second-largest source of US imports, by singling it out for an additional tariff increase while suspending most of the "reciprocal" levies levied on dozens of other countries.

Behind the scenes, trade negotiators from both sides have reportedly held informal discussions in recent weeks, but progress has been stalled by disagreements over market access and technology restrictions. The Biden administration has maintained that tariffs are a necessary tool to address China’s unfair trade practices, while Beijing insists that the measures are politically motivated and harm global economic recovery.

"The US imposition of abnormally high tariffs on China seriously violates international and economic trade rules, basic economic laws and common sense and is completely unilateral bullying and coercion," according to China's Finance Ministry.

The ripple effects of the trade tensions extend beyond the two superpowers, with European and Asian economies closely monitoring the situation. Some nations, including Germany and South Korea, have expressed concerns over the potential for collateral damage, as their export-driven industries rely on stable trade flows between the US and China. Meanwhile, multinational corporations are reassessing their supply chain strategies to mitigate risks from prolonged tariff wars.

A spokeswoman stated that Washington's tariffs on Chinese goods have "become a numbers game with no practical significance in economics". It will simply highlight the United States'... bullying and coercion. "It will become a joke."

Despite the rhetoric, market reactions have been muted so far, suggesting investors may have priced in further escalations. However, economists caution that prolonged friction could erode business confidence and dampen foreign direct investment in both countries at a time when global growth remains fragile.