China imposed a sweeping 125% tariff on U.S. goods Friday in direct response to former President Donald Trump's latest tariff hike, labeling Washington's strategy "a joke" and vowing to fight back as the trade war deepens. The move raises the total average U.S. tariff burden on Chinese exports to 135%, levels not seen since the start of the 2018 trade conflict.
Beijing's Finance Ministry issued a scathing statement condemning the Trump administration's tariff escalation as "an act of unilateral bullying and coercion" that "seriously violates international economic and trade rules." The ministry added, "Even if the U.S. continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics."
The tariffs, which take effect Saturday, are seen by analysts as effectively shutting down bilateral goods trade. "Trade between the two countries has essentially been completely severed," UBS analysts wrote, noting that average duties now make it unprofitable for exporters on both sides.
China's move came two days after Trump announced plans to raise tariffs on Chinese goods to a cumulative 145%, while pausing duties on imports from dozens of other countries. In retaliation, China not only raised tariffs but also restricted imports of Hollywood films and issued a travel advisory for Chinese nationals considering travel or study in the United States, with a specific alert targeting Ohio.
"The U.S. alternately raising abnormally high tariffs on China has become a numbers game," a spokesman for China's Ministry of Commerce said, reiterating the government's pledge to "fight to the end" if provoked further. The Commerce Ministry added it had filed a new lawsuit with the World Trade Organization, arguing that Washington "should bear full responsibility" for the "serious shocks and severe turbulence" in the global economy.
The conflict now encompasses the entirety of U.S.-China trade. As of Friday, 100% of each country's exports to the other are subject to tariffs, up from 63% of Chinese exports and 67% of U.S. exports earlier this year, according to the Peterson Institute for International Economics.
President Xi Jinping, seeking to broaden alliances amid the standoff, told Spanish Prime Minister Pedro Sanchez that China and the European Union should "jointly oppose unilateral acts of bullying." Xi is preparing for a diplomatic tour of Southeast Asia next week, with stops in Vietnam, Malaysia, and Cambodia aimed at reinforcing China's economic ties in the region.
Eric Olander, co-founder of the China-Global South Project, noted that China's focus with its neighbors is likely to be on practical gains such as agricultural trade, rather than sweeping agreements. "China's best offer to Vietnam is stability. Don't underestimate how important that is at a time like this," he said.
Chinese Commerce Minister Wang Wentao has already held video meetings with trade officials from the EU, Malaysia, Saudi Arabia, and South Africa as part of a broader campaign to build global support. Following talks with European Commissioner Maros Sefcovic, both sides agreed to resume discussions on trade relief and begin negotiations on electric vehicle pricing, hinting at a potential détente.
Still, Beijing maintains its hard stance toward Washington. "China remains open to negotiations with the U.S., but threatening and pressuring are not the right way to engage with China," the Commerce Ministry stated.
The Chinese yuan, which had fallen to levels not seen since the global financial crisis earlier this week, showed a slight recovery on Friday as markets adjusted to Beijing's response.
