China Hits Trump with 125% Tariff on U.S. Goods as Trade War Deepens

Tensions between the U.S. and China are rising again. China has announced a steep increase in tariffs on American goods, raising them to 125%. This move comes just after President Trump hiked tariffs on Chinese imports to 145%. The trade war between the two economic giants is clearly intensifying, with no signs of slowing down.

The back-and-forth is starting to feel less like negotiation and more like a full-blown standoff. With both countries digging in their heels, global markets are reacting, and the ripple effects are being felt around the world.

Let’s break down what’s happening.

China Dismisses U.S. Tariff Pressure

China’s response was firm. Its State Council Tariff Commission said it would not acknowledge any further U.S. tariff actions on Chinese exports. As the world’s second-largest economy and a major supplier to the U.S., China is making it clear that it won’t back down under pressure.

In a statement shared by the finance ministry, the commission said, “The abnormally high tariffs imposed by the U.S. seriously violate international trade rules, basic economic principles, and amount to unilateral bullying and coercion.”

The new tariffs will take effect on Saturday, April 12th.

China Warns of Strong Countermeasures

China also warned that if the U.S. keeps pushing forward with policies that harm its economic interests, it will “resolutely counterattack and fight till the end.” While Trump granted a 90-day tariff pause to some other countries, Chinese goods were hit the hardest with sharp increases.

Xi Jinping Calls for Europe’s Support

This comes hours after President Xi Jinping asked the European Union to team up with China to fight against the Unilateral bullying. “China and Europe should fulfil their international responsibilities… and jointly resist unilateral bullying practices,” he said.

Germany’s Finance Minister Joerg Kukies said the EU is in a strong position to negotiate with the U.S. over tariffs. But he warned that if no fair deal is reached, the EU may have to consider other ways to respond.

Global Markets React

Financial markets responded quickly to the worsening trade tensions. Bitcoin stayed flat at $81,537, but Ethereum dropped over 2% to $1,549.

In the U.S., stock futures became unstable. Dow futures, which were up 400 points at one stage, started fluctuating. S&P 500 and Nasdaq futures also showed signs of weakness.

Investors Turn to Gold

The effects of the trade conflict were felt worldwide. Global stocks fell, the U.S. dollar lost ground, and there was a rapid sell-off in U.S. government bonds. This raised concerns about instability in the bond market.

At the same time, gold—seen as a safe investment during uncertain times—soared to a record high. Adam Hetts, Global Head of Multi-Asset at Janus Henderson, says that risk of a recession is much higher now than it was a couple of weeks ago.

Watch this space closely. Things are going to get more interesting!