China strikes back with 125% tariffs

China has retaliated against the U.S. President Donald Trump’s reciprocal tariffs by raising its levies on U.S. goods to 125% from 84%, the finance ministry said.

As a result, Trump administration confirmed that the U.S. tariff rate on Chinese imports now effectively totals 145%.

“Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the ministry said in a statement.

“With tariff rates at the current level, there is no longer a market for U.S. goods imported into China,” the statement noted, adding that “if the U.S. government continues to increase tariffs on China, Beijing will ignore.”

“This is the end of the escalation in terms of bilateral tariff rates. Both China and the US have sent clear messages, there is no point of raising tariffs further,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

The next step would be to evaluate the damage to economic activities in the U.S. and China, Zhang said, adding that there is no sign that the two governments would start negotiations and avoid major disruption in the global supply chains.

EDITORIAL OPINION

At midnight, triple-digit tariffs hit China, targeting their strategy of flooding global markets with cheap goods to fund military expansion and challenge US dominance.

Without access to America, the world’s top consumer, China has nowhere else to sell: Europe lacks demand, and domestic buyers are shrinking with falling birthrates.

Economic pain in China means mass layoffs, and mass layoffs threaten communist control.

To avoid chaos, the U.S. must bury Beijing’s ambitions with diplomatic finesse, not a hammer.

Asia is lining up in Washington to cut deals, and Trump holds the cards. If he pulls this off, he may not just reshape trade—he could rewrite history.

The Wall Street Journal, citing economists, says the world is heading toward a disorderly economic decoupling between the United States and China.