BEIJING, China— China announced Friday that it will raise tariffs on US goods from 84% to 125%, the latest salvo in the world’s two largest economies’ escalating trade war, which has rattled markets and raised fears of a global slowdown.
While US President Donald Trump paused import taxes for other countries this week, he increased tariffs on China, bringing them to 145%. China has condemned the policy as “economic bullying” and promised countermeasures. The new tariffs take effect Saturday.
Washington’s repeated tariff increases “will become a joke in the history of the world economy,” a Chinese Finance Ministry spokesman said in a statement announcing the new tariffs. “However, if the U.S. insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”
China’s Commerce Ministry announced that it will file another World Trade Organization lawsuit against US tariffs.
“There are no winners in a tariff war,” Chinese President Xi Jinping stated during a meeting with Spanish Prime Minister Pedro Sanchez, according to a readout from state broadcaster CCTV. “For more than 70 years, China has always relied on itself … and hard work for development, never relying on favors from anyone, and not fearing any unreasonable suppression.”
Trump’s on-again, off-again policies have sparked concern in the stock and bond markets, prompting some to warn that the United States may be heading for a recession. There was some relief when Trump paused tariffs on most countries, but concerns remain because the United States and China are the world’s top and second economies, respectively.
“The risk that this escalating trade war tips the world into a recession is rising as the world’s two largest and most powerful countries continue to punch back with higher and higher tariffs,” Jennifer Lee, a senior economist at BMO Capital Markets, wrote on Friday. “No one truly knows when this will end.”
Chinese tariffs will affect goods such as soybeans, aircraft and parts, and drugs, which are among the country’s major imports from the US. Meanwhile, Beijing suspended imports of sorghum, poultry, and bonemeal from some American companies last week and tightened export controls on rare earth minerals, which are critical for a variety of technologies.
Meanwhile, the United States’ top imports from China include electronics such as computers and cell phones, as well as industrial equipment and toys, which are likely to see price increases due to tariffs of 145%.
Trump announced on Wednesday that China would face 125% tariffs, but he did not include a 20% tariff on China due to its involvement in fentanyl production.
White House officials hope that the import taxes will increase manufacturing jobs by bringing production back to the United States — a politically risky trade-off that could take years, if at all.