LDN - Business

Trump hits back with a 125% tariff in escalating trade war with China

[April 10, 2025] By HUIZHONG WU

BANGKOK (AP) — President Donald Trump raised the tariff on Chinese imports to 125% on Wednesday, hours after China boosted the duty on American goods to 84% in an escalating battle that threatens to disrupt trade between the world's two largest economies.

Citing a lack of respect, Trump set China apart from other countries. He said in a social media post that he is pausing his so-called “reciprocal tariffs” on many other trading partners because they had responded by reaching out for talks rather than retaliating.

The tit-for-tat hikes between the U.S. and China are the latest in an ongoing trade war that threatens to raise prices for consumers in America and derail China’s attempts to reinvigorate its sluggish economy. The response from the Chinese government signals its determination not to bend to Trump’s pressure, despite the risks.

“If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” China's Ministry of Commerce said before announcing its latest tariff hike.

In Washington, White House press secretary Karoline Leavitt said: “When you punch at the United States of America, President Trump is going to punch back further."

China is a major exporter to the US but no longer No. 1

The United States sent a record $199 billion in exports to China last year, while China exported $463 billion in goods and services to the United States, third behind Mexico and Canada, according to the U.S. Commerce Department.

Top U.S. exports to China in 2024 included soybeans, aircraft, pharmaceuticals and semiconductors. In the other direction, mobile phones, computers, toys and clothing were among major imports from China. The manufacturing giant was the top source of U.S. imports as recently as 2022 but it has lost ground to America’s neighbors amid heightened tensions with the United States.

The European Chamber of Commerce in China accused the U.S. of rolling back many of the principles that have underpinned its approach to trade and investment. It said that Trump's tariffs would have a significant impact on European companies exporting from China to the U.S., forcing them to rethink their business models and supply chains.

“This will lead to a substantial increase in operational costs and inefficiencies, and ultimately higher prices for consumers,” it said.

No ‘easy path’ to restarting U.S.-China trade talks

Though the U.S. and China may want to find a way back to the negotiating table, "this won’t be an easy path to navigate with both countries doubling down and bilateral engagement at a virtual standstill,’’ said former U.S. trade official Wendy Cutler, a vice president at the Asia Society Policy Institute.

China does not appear interested in bargaining, as some other countries have started doing.

“If the U.S. truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit," Foreign Ministry spokesperson Lin Jian said.

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Pedestrian and office buildings are reflected on a brokerage house's window as an electronic board displays Shanghai shares trading index in the Central Business District, in Beijing, Wednesday, April 9, 2025. (AP Photo/Andy Wong)

The Chinese Ministry of Culture and Tourism issued a travel advisory asking its citizens to evaluate the risks of visiting the U.S. as tourists and to exercise caution. The advisory, which came shortly after the announcement of China's latest tariff hike, cited the deterioration in economic and trade relations as well as the “safety situation” in America.

China's response has gone from measured to tough

Trump has now raised the tariff on Chinese goods five times since taking office in January. The first two hikes of 10% each were met with what analysts described as a measured response from China that left the door open for talks.

But after Trump announced an additional 34% duty on Chinese goods last week, along with tariffs on other countries in his “Liberation Day," China matched that with a 34% tariff on imports from the U.S.

Trump then added a 50% tariff on goods from China, saying negotiations were terminated, and bringing the cumulative U.S. tariff to 104%. China responded by raising the tariff on American products by the same amount, bringing its total rate to 84%. Then Trump upped the American tariff to 125%.

China said it was also launching a new challenge to the U.S. tariffs at the World Trade Organization and adding 11 American companies to an “unreliable entities” list that bars Chinese companies from selling them goods that could have military uses. Among the companies are American Photonics, and SYNEXXUS, which both work with the American military.

The trade dispute has set back efforts to resolve a standoff over the TikTok short video app.

Trump signed an order last week to keep TikTok running for another 75 days after a potential deal to sell the app to American owners was put on ice. Representatives from ByteDance, the Chinese company that owns the app, told the White House that Beijing would no longer approve a deal until there could be talks on trade.

“History and facts have proven that the United States’ increase in tariffs will not solve its own problems,” the Commerce Ministry said Wednesday. “Instead, it will trigger sharp fluctuations in financial markets, push up U.S. inflation pressure, weaken the U.S. industrial base and increase the risk of a U.S. economic recession, which will ultimately only backfire on itself.”
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Associated Press writers Didi Tang and Paul Wiseman in Washington and researcher Yu Bing and video producer Liu Zheng in Beijing contributed to this report.

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