China has sharply escalated its trade confrontation with the United States, raising tariffs on American goods to 125% from 84% in response to President Donald Trump’s reciprocal duties.
The announcement, made on Friday by the Customs Tariff Commission of the State Council, marks a new peak in the tit-for-tat trade battle that has battered global markets and dampened hopes for a negotiated resolution.
“Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the Chinese statement read, according to a CNBC translation.
Officials in Beijing also declared that with tariffs at such levels, there is effectively no longer a market for US imports into China.
They warned that further US actions would be ignored entirely.
The Trump administration confirmed a day earlier that US tariffs on Chinese imports now amount to an effective rate of 145%, further intensifying the standoff.
“There are no winners in a trade war, and going against the world will only lead to self-isolation,” Xi told Spanish Prime Minister Pedro Sanchez in Beijing on Friday, according to state broadcaster CCTV.
China brands US measures as economic bullying
Separately, China’s Ministry of Commerce issued a strongly worded condemnation of Washington’s approach, describing US tariff actions as “typical unilateral bullying” and a serious breach of World Trade Organization (WTO) rules.
Beijing said it had lodged a fresh complaint with the WTO over the latest round of US tariff hikes.
“We urge the US to immediately correct its wrong practices and cancel all unilateral tariff measures against China,” a ministry spokesperson said, underscoring Beijing’s hardening stance.
Chinese officials have repeatedly accused the Trump administration of escalating tensions for domestic political gain.
“The successive imposition of excessively high tariffs on China by the US has become nothing more than a numbers game, with no real economic significance,” a spokesperson for China’s Commerce Ministry said in a statement Friday.
Hopes for resolution fade as both China, US dig in their heels
The prospect of a breakthrough in US-China trade talks has all but evaporated, as both sides dig in for what increasingly looks like a prolonged economic conflict.
“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,” US Treasury Secretary Scott Bessent said in an interview with Fox Business.
He criticised Beijing’s stance and argued that China’s economic structure remains dangerously imbalanced.
Beijing, meanwhile, has made clear it will not back down. According to Reuters, China’s commerce minister reaffirmed the country’s determination to defend its interests with “resolute countermeasures.”
European markets give up morning gains
The latest escalation rattled European markets, wiping out early gains.
The FTSE 100 slipped 0.048%, the Stoxx 600 fell 0.51%, Germany’s DAX dropped 0.61%, and France’s CAC 40 lost 0.45% in morning trading.
Investment bank Goldman Sachs on Thursday cut its forecast for China’s 2025 GDP growth to 4%, citing the drag from trade tensions and softer global demand.
Although exports to the US account for just around 3% of China’s GDP, Goldman analysts estimate that between 10 million and 20 million Chinese jobs are linked to these shipments, highlighting the broader economic risks.
As the rhetoric sharpens and retaliatory measures mount, the world’s two largest economies appear locked in an increasingly bitter standoff with no clear off-ramp in sight.
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