China has announced that it will impose 125% tariffs on U.S. goods starting Saturday, intensifying the trade war between the world’s two largest economies. The decision comes in direct response to Washington’s recent tariff hike on Chinese imports to 145%.
Strong Rebuke from Beijing
The Customs Tariff Commission of the State Council said the new tariffs were enacted due to what it called the “unilateral bullying and coercion” by the United States. The commission accused the U.S. of violating international trade rules and applying excessive pressure through protectionist policies.
“Even if the U.S. imposes even higher tariffs, it would no longer make economic sense and ultimately go down as a joke in world economic history,” the commission said, according to Xinhua News Agency.
Beijing also noted that the Chinese market can no longer absorb U.S. goods at such high tariff levels, suggesting a severe drop in American exports to China if the conflict continues. Still, China emphasized that it remains open to negotiations.
Trump Acknowledges Transition Challenges
In response to rising concerns, President Donald Trump addressed the situation, admitting there would be “transition problems” due to the sharp changes in tariff policy. The administration had recently paused tariffs for over 75 countries for 90 days, further highlighting its selective approach to global trade policy.
Market Reaction: Sharp Volatility
U.S. markets responded sharply to the developments. The Dow Jones Industrial Average, which surged nearly 3,000 points the previous day, dropped 1,015 points (2.5%) on Friday. The S&P 500 fell 3.46%, while the Nasdaq Composite lost 4.31%, reflecting investor unease.
More Countermeasures Expected
China warned that if the U.S. continues to undermine its economic interests, it will take “firm countermeasures and fight to the end”.
The escalating trade tensions raise fresh concerns about global supply chains, inflationary pressures, and economic instability. Economists caution that a prolonged tariff war could reverberate throughout international markets and strain bilateral relations for years to come.
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