China Increases Tariffs on U.S. Goods to 125% in Escalating Trade Conflict

Chinese President Xi Jinping, right, and Spanish Prime Minister Pedro Sanchez speak as they walk along the gardens of Diaoyutai Guest House after a meeting in Beijing on Friday. Xi commented on Trump's tariffs for the first time since Liberation Day last week.

China announced on Friday that it will raise tariffs on U.S. goods from 84% to 125%, intensifying the ongoing trade war between the world's two largest economies. The decision marks a sharp escalation in tensions and has fueled concerns about global economic stability and a potential recession.

The new Chinese tariffs, which take effect on Saturday, were announced in response to the United States increasing its own tariffs on Chinese goods to a total of 145%. While the U.S. paused import taxes this week for other countries, it maintained a hard line against China. Beijing denounced the move as “economic bullying” and promised firm countermeasures.

In a statement, a spokesperson for China’s Finance Ministry criticized Washington’s tariff hikes, calling them “a joke in the history of the world economy.” The spokesperson warned that if the U.S. continues to infringe on China’s economic interests, China would “resolutely counter and fight to the end.”

The Chinese Commerce Ministry confirmed plans to file another lawsuit with the World Trade Organization (WTO) in opposition to the latest round of U.S. tariffs.

During a meeting with Spanish Prime Minister Pedro Sánchez, Chinese President Xi Jinping commented on the ongoing trade dispute, stating, “There are no winners in a tariff war.” He emphasized China’s self-reliance over the past 70 years, noting the country’s development has come through “hard work,” without dependence on external favors or fear of “unreasonable suppression.”

U.S. President Donald Trump’s fluctuating trade policies have caused volatility in financial markets, leading to warnings from analysts and economists about the growing risk of a global recession. While the temporary pause on tariffs for other countries brought some relief, the escalation with China continues to raise alarm.

Jennifer Lee, a senior economist at BMO Capital Markets, wrote that “the risk that this escalating trade war tips the world into a recession is rising as the two largest and most powerful countries in the world continue to punch back with higher and higher tariffs.” She noted the uncertainty over how or when the conflict might be resolved.

China’s new tariffs will target key U.S. exports such as soybeans, aircraft and parts, and pharmaceuticals. In addition, Beijing suspended imports of sorghum, poultry, and bonemeal from certain American firms last week and introduced further export controls on rare earth minerals, which are vital to numerous high-tech industries.

On the U.S. side, imports from China — which include electronics such as computers and smartphones, industrial machinery, and toys — are now subject to a 145% tariff. This increase is expected to lead to higher costs for both consumers and businesses in the United States.

Trump announced on Wednesday that China would face tariffs of 125%, though he opted not to implement an additional 20% tariff related to China’s alleged involvement in fentanyl production.

The White House maintains that the import taxes are intended to boost domestic manufacturing by encouraging companies to relocate production back to the United States. However, this strategy remains a politically risky gamble that could take years to produce tangible results, if it succeeds at all.