China has announced a new 125 per cent tariff on goods coming in from the United States.
The move matches the current US tariff on Chinese goods, continuing a tit-for-tat pattern that’s defined the escalating trade war between the world’s two biggest economies.
Beijing’s latest decision signals it’s prepared to mirror Washington’s tariff hikes step for step, as tensions continue to rise on both sides.
The new 125 per cent tariffs will come into force from tomorrow, according to China’s finance ministry.
In a strongly worded statement, Beijing warned it would “fight to the end” if the US continues to target Chinese interests, vowing further retaliation if necessary.
“The US’s imposition of abnormally high tariffs on China seriously violates international trade rules, basic economic laws and “common sense,” the ministry said, accusing Washington of “unilateral bullying and coercion.”
This move follows Trump’s recent decision to raise tariffs on Chinese imports to a total effective rate of 145 per cent, which includes a baseline 125 per cent tariff and an additional 20 per cent levy related to China’s alleged role in the fentanyl crisis.
While the Trump administration announced a 90-day pause on additional tariffs for most countries, the increased tariffs on Chinese goods remain in place.
The tit-for-tat measures have intensified concerns over a full-blown trade war between the world’s two largest economies.
Economists warn that rising global trade tensions could put pressure on British exports, supply chains, and business investment. Manufacturing and automotive sectors—both heavily reliant on international trade—are expected to feel the impact most sharply.
US stock markets have reacted negatively to the escalating trade tensions. The S&P 500 fell by 4.5 per cent, the Nasdaq by 5.25 per cent, and the Dow Jones by 3.67 per cent.
Major corporations including Apple, Meta, Tesla, and Microsoft suffered steep declines. Former Treasury Secretary Janet Yellen criticized the tariffs as a severe self-inflicted economic wound, warning of recession risks.
China hits US with 125 per cent tariff in major trade war escalation
REUTERS
As the trade conflict continues to unfold, businesses and investors worldwide are bracing for further volatility and economic uncertainty.
Analysts say the escalation could also lead to price hikes on consumer goods, as businesses pass rising import costs onto shoppers.
There are growing fears that prolonged trade tensions could drag down global growth and trigger a recession in the US.