China Hikes Tariffs on U.S. Goods to 125% in Trade War Escalation

China has responded to the United States' recent tariff increases by implementing retaliatory tariffs of its own, labeling the U.S. actions as a "joke." The escalation in trade tensions comes as China announced it would raise tariffs on all U.S. goods to 125%, a significant increase from the previously announced 84%. This move, effective from Saturday, matches the so-called "reciprocal" levy imposed by the U.S. The new tariffs are part of a broader strategy by China to counter what it perceives as aggressive trade policies from the U.S., which have included sweeping new tariffs and export controls on rare earth materials crucial to the tech and electric vehicle industries.

The escalation in tariffs began with China imposing 84% additional duties on American goods in response to Trump's fresh April 2 burst of tariffs. This initial retaliation was followed by a series of measures, including a 34% tariff on U.S. goods, which prompted Trump to respond with an additional 50% tariff, pushing the overall tariff rate to 104%. The latest move to 125% tariffs is a clear indication of China's determination to match the U.S. tariffs dollar for dollar, as part of its strategy to mitigate the impact of the trade war on its economy.

The Finance Ministry of China announced that the new tariffs would take effect from April 12, following Trump's decision to hike U.S. tariffs. This escalation in trade tensions has had a ripple effect on global markets, with China's SSE Composite index showing bullishness despite the lack of relief from the U.S. in its decision to impose a high tariff of 125%. The move by China is seen as a defensive measure to protect its domestic industries from the adverse effects of the trade war, which has been ongoing for several years.

The escalation in tariffs is part of a broader strategy by China to counter what it perceives as aggressive trade policies from the U.S. The move to 125% tariffs is a clear indication of China's determination to match the U.S. tariffs dollar for dollar, as part of its strategy to mitigate the impact of the trade war on its economy. The escalation in tariffs is likely to have a significant impact on global trade, as both countries are major players in the global economy. The move by China is seen as a defensive measure to protect its domestic industries from the adverse effects of the trade war, which has been ongoing for several years.