By raising tariffs on American imports to 125%, which will take effect on April 12, 2025, China has intensified its trade reaction. The trade war between the two biggest economies in the world is getting more intense as a result of this action in retaliation for the U.S. imposing 145% tariffs on Chinese products.
The U.S. tariff increases were referred to as a "joke" by the Chinese Finance Ministry, which said they had no economic impact and revealed American bullying practices. Beijing hinted that this might be its last tariff match and threatened to take further action if tensions increased.
Global supply chains could be disrupted by the tit-for-tat tariffs; economists warn that taxes above 35% could eliminate exporters' profit margins. There is significant strain on the U.S.-China trade, which is expected to be worth over $650 billion in 2024.
While criticizing U.S. pressure tactics, China's Commerce Ministry stressed its openness to negotiations. In response to U.S. trade policy, Beijing is fortifying its relations with other countries, such as the EU, Malaysia, and Vietnam.
The U.S. dollar fell about 2% vs the euro, and gold reached all-time highs above $3,200 as global markets responded with volatility. Bond yields rose despite U.S. stocks ending higher, indicating investor apprehension over the effects of the trade conflict.
In an interview with the prime minister of Spain, Chinese President Xi Jinping emphasized that trade battles are a losing proposition and urged multilateral collaboration. In order to strengthen EU ties during the U.S. war, China secured agricultural trade agreements with Spain.
Unfazed, the U.S. administration asserts that new trade agreements with other countries will bring stability to the markets. China is still the major target, but more than 75 nations have allegedly approached the White House to discuss tariff relief.
As the U.S.-China trade conflict intensifies, economists warn of increased dangers of a recession. Fears of price increases and a slowdown in the economy brought on by tariff measures caused consumer mood in the United States to fall to a near-record low.
China is to launch a legal counteroffensive by contesting U.S. tariffs at the World Trade Organization. The world economy prepares for increased expenses, interrupted commerce, and possible changes in international alliances as both countries dig in.