China will impose 125% tariffs on U.S. goods starting Saturday, up from the previously announced 84%, as the trade war between the world’s two most powerful nations continues.
“The U.S.’s imposition of abnormally high tariffs on China seriously violates international trade rules, basic economic laws, and common sense,” Beijing’s State Council Tariff Commission said in a statement shared by the Finance Ministry, adding that the new levy will take effect on Saturday.
U.S. stock index futures turned lower after China announced additional tariffs on U.S. goods. Following the hike, S&P 500 e-mini futures were flat, NASDAQ futures were up 0.2%, and DOW futures were down 0.2%.
A slowdown in the U.S. economy could weigh on Info Edge in the short term; traders may consider going short.
The hike comes after the White House kept up pressure on the world’s No. 2 economy — and second-biggest provider of U.S. imports — by singling it out for an additional tariff increase, having paused most of the “reciprocal” duties imposed on dozens of other countries.
“If the U.S. insists on continuing to substantially infringe upon China’s rights and interests, China will resolutely counterattack and fight to the end,” said the Chinese Commerce Ministry.
China-U.S. Trade War Continues
Former President Donald Trump had previously announced a 90-day tariff pause on dozens of countries after his rapid-fire duties rocked financial markets, but at the same time, he raised tariffs on Chinese imports — lifting them to an effective rate of 145%.
The trade spat with the United States comes as Chinese policymakers struggle to revitalize the economy after the COVID-19 slump, with domestic demand remaining sluggish due to weak consumer confidence in the face of a years-long property market crisis and renewed deflationary pressure.
Can Trump Hurt China’s Economy?
China’s economy likely slowed in the first quarter, while 2025 growth is expected to lag behind last year’s pace, according to a Reuters poll. This ramps up pressure on Beijing to roll out further stimulus measures, as surging U.S. tariffs threaten to deal a damaging blow to the Asian giant.
The world’s second-largest economy, which got off to a bumpy start this year, is facing one of its biggest challenges to financial stability and growth, as U.S. President Donald Trump ratchets up tariffs on Chinese goods to eye-watering levels.
Gross domestic product (GDP) growth in the first quarter is forecast at 5.1% year-on-year, down from 5.4% in the October–December quarter, according to a Reuters poll of 57 economists released Friday.
Growth is likely to slow further to 4.5% in 2025, compared with last year’s 5.0% pace, based on the median forecast in the poll — falling short of the official target of around 5.0%.
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