China has announced a 125% tariff on U.S. goods, escalating its trade war with the United States while declaring that it will ignore any further tariff hikes from President Donald Trump. Beijing accused the U.S. of unleashing market chaos and insisted the burden of this disruption rests squarely on America’s shoulders. Trump had earlier raised tariffs on Chinese goods to a staggering 145%—part of his broader strategy to force companies back into the U.S. and push for fairer trade terms. However, China now says that at such high levels, importing from the U.S. is no longer economically viable, rendering future hikes meaningless. Beijing’s commerce ministry dismissed the U.S. moves as a “numbers game” with no real economic value and stated that additional U.S. actions would be met with silence, not retaliation. They also plan to file a lawsuit at the World Trade Organization over the latest tariffs.
Amid the trade tension, global markets continue to feel the heat. Wall Street has seen fresh declines, while Asian markets like Tokyo fell over 4%. European markets also dipped in response to China’s latest move. Oil and the U.S. dollar are slipping, and gold has soared to a record above $3,200 as jittery investors flee U.S. Treasuries. Trump remains bullish, calling the situation a “transition phase” and claiming it will all lead to a “beautiful thing.” Meanwhile, the EU is keeping its countermeasures ready. Ursula von der Leyen noted that levies on digital services revenue are one of the possible responses, while French President Macron urged Europe to stay strong and continue preparing necessary responses.
China is not standing alone. President Xi Jinping has called on the EU to join forces in resisting unilateral pressure, advocating for shared responsibility and global fairness. Talks between Xi and Spain’s Prime Minister reinforced this message, with the Chinese leader emphasizing unity against economic bullying. While Trump has paused many of the broader global tariffs for 90 days, his warning remains that they could return if a deal isn’t reached. Canada, Vietnam, and Pakistan are already maneuvering diplomatically—Canada calls the freeze a welcome reprieve and is open to new trade talks after their April 28 elections, while Vietnam and Pakistan have each initiated talks with Washington.
The market reaction underscores growing concern: this isn’t just a standoff—it’s a full-blown trade war. And as analysts are saying, there are no winners here—only rising uncertainty.
