U.S. President Donald Trump has sharply escalated his administration’s trade war with China, announcing a dramatic increase in tariffs to 125% on Chinese imports.
The move is paired with a 90-day pause on higher tariffs for dozens of other countries, as the White House seeks to isolate Beijing amid a growing economic standoff.
The latest action from Washington triggered an immediate response from China, which unveiled retaliatory tariffs of 84% on U.S. goods Wednesday, matching Trump’s earlier hike and further inflaming tensions between the world’s two largest economies.
Trump’s sweeping “reciprocal” tariffs took effect earlier in the day, hitting China the hardest. The new measures pushed levies on Chinese goods from an already high 104% to 125% after the president tacked on an additional 50 percentage points, citing China’s refusal to back down.
Beijing, which has matched each U.S. move with its own, condemned the escalation. “The US escalation of tariffs on China is a mistake upon mistake, severely infringing upon China’s legitimate rights and interests, and seriously damaging the multilateral trading system based on rules,” China’s State Council Tariff Commission said in a statement.
China had repeatedly warned it would “fight to the end” if Washington went forward with new tariffs. Its response went beyond import duties—Beijing also imposed export controls on 12 U.S. companies, restricting access to dual-use items with civilian and military applications. Six additional American firms were added to its “unreliable entity list,” cutting them off from trade and investment in China. Beijing also lodged a complaint with the World Trade Organization over the U.S. actions.
The tariff escalation rattled global markets, with U.S. stock futures falling on news of Beijing’s countermeasures. Peter Boockvar, chief investment officer at Bleakley Financial Group, captured the mood in a note to clients: “This is getting so ridiculous that it’s hard to believe it’s actually happening between the two largest economies that make up almost $50 trillion of global GDP, almost half of the world – let alone a tariff war against the whole world.”
U.S. Treasury Secretary Scott Bessent appeared unfazed, saying it was “unfortunate that China does not want to come and negotiate” and labeling the country “the worst offenders in the international trading system.”
“They have the most imbalanced economy in the history of the modern world… They’re the surplus country,” Bessent said on Fox Business. “Their exports to the US are five times our exports to China. So, they can raise their tariffs. But so what?”
China, while maintaining a defiant posture, has also called for dialogue. A Foreign Ministry spokesperson said the U.S. must “demonstrate an attitude of equality, respect and mutual benefit” to resolve the dispute. In a newly released white paper on trade relations with the U.S., China’s Commerce Ministry stressed it does not want a trade war, but will “never sit idly by” while its rights are threatened.
“If the US insists on further escalating trade restrictions, China has the firm will and ample tools to take resolute countermeasures — and will see it through to the end,” an unnamed ministry official said.
Despite efforts to bolster domestic consumption, China is bracing for fallout, particularly in its export sector. Last year, trade between the U.S. and China totaled around $500 billion—a relationship now at risk as the tariff war intensifies.
