China Strikes Back with 125% Tariffs in Response to Trump’s Trade War Escalation
China has responded to President Donald Trump’s latest escalation in the ongoing trade war by announcing it will impose 125% tariffs on US goods, up from the current rate of 84%, effective tomorrow.
Beijing’s foreign ministry confirmed the move, stating there would be no further tariff hikes, as “there is no longer any possibility of market acceptance for US goods exported to China.”
The announcement follows President Trump’s decision on Thursday to raise tariffs on Chinese imports to 145%, intensifying tensions between the world’s two largest economies.
In a strongly worded statement, China’s foreign ministry said: “Given that there is no longer any possibility of market acceptance for US goods exported to China under the current tariff levels, if the US side subsequently continues to impose tariffs on Chinese goods exported to the US, the Chinese side will pay no attention to it.”
Markets across Asia reacted sharply. Hong Kong’s Hang Seng Index was on track for its worst weekly performance since the 2008 financial crisis, although it later reversed some losses to trade higher. Japan’s Nikkei tumbled 3%, following a downturn on Wall Street, while oil prices headed for a second consecutive weekly decline.
Despite the turmoil in Asia, European markets opened on a positive note. The FTSE 100 climbed as much as 0.8% after data revealed the UK economy grew more than expected in February—prior to Trump’s latest tariff move.
In Washington, US Treasury Secretary Scott Bessent sought to reassure markets, saying over 75 countries had expressed interest in launching trade negotiations. President Trump also struck a more optimistic tone, suggesting a deal with China could still be possible.
However, the S&P 500 fell 3.5% on Thursday and is now down approximately 15% from its February peak.
