The Chinese government announced on Friday (April 11) that retaliatory tariffs on American products would be increased to 125%, signaling a further escalation in the US-China trade war. Analysts at UBS pointed out that this effectively means a complete cessation of trade between the two countries. President Trump reiterated the firm position of the United States on tariffs on Friday morning.
Trump announced on Wednesday (April 9) that “reciprocal tariffs” on China would be raised to 125% in response to China’s continuous retaliation against the United States without seeking negotiations. Trump also incentivized countries that have not retaliated but wish to negotiate with the US by delaying the implementation of “reciprocal tariffs” on these countries by 90 days to initiate trade talks.
In retaliation for Trump’s escalation of tariffs on China, the Chinese State Council Customs Tariff Commission issued a statement on Friday declaring that the tariff rate on imported goods from the US would be raised from 84% to 125%.
The statement also indicated that under the current tariff levels, there is no market acceptance possibility for US goods exported to China. If the US continues to play tariff number games, China will ignore it.
According to Reuters, analysts say that the increased tariffs between the US and China will make it impossible for trade in goods between the two countries. In 2024, trade between the US and China exceeded $650 billion.
UBS analysts stated in a report that Beijing announced it would not retaliate further by increasing tariffs, “acknowledging that trade between the two countries has basically been completely severed.”
Despite China’s announcement of a new round of retaliatory tariffs, the US government on Friday reiterated its position. The US stated that it is negotiating new trade agreements with multiple countries, which will prove that the significant adjustments to US policy are reasonable.
“We are doing very well on tariff policy. It’s very exciting for the USA and the world!!! Progress is fast,” Trump posted on his social media platform Truth Social on Friday morning.
US Trade Representative Jamieson Greer, in an interview with Fox News on Friday, called China’s latest retaliatory action in the trade war with the US “regrettable.”
“I would say that China’s response this morning isn’t particularly surprising, but it’s certainly regrettable,” he said.
“No other country has taken retaliatory measures against these reciprocal tariffs at the moment. China is ahead in deciding to do so, which is why they are in a different situation with other countries,” Greer added.
He also mentioned that the US has not initiated trade talks with Beijing. When asked if there have been any discussions between the US and China, Greer replied at the White House, “Not at the moment.”
Regarding the rollercoaster market reactions, Greer said, “There may be adjustments, but I think we are on a good path.”
“I know, we do import a lot of products from China, which actually underscores the urgency for us,” he said, emphasizing the need for the US to diversify to reduce dependency on China.
Greer is currently engaged in trade talks with multiple countries, with a busy schedule ahead.
Meanwhile, an Indian trade official stated that India and the US have finalized the scope of the first part of bilateral trade agreement negotiations.
Greer has conducted trade negotiations with Vietnam, and is scheduled to hold talks with Taiwan and Israel. To avoid facing up to a 46% “reciprocal tariff” imposed by the US, Vietnam plans to crack down on “transshipment tax avoidance” activities by Chinese enterprises conducted within its borders and strengthen control over sensitive technology exports to China to ease pressure from the US.
Japanese Prime Minister Shigeru Ishiba has established a trade working group and hopes to visit Washington next week for trade negotiations.
Xi Jinping commented on Trump’s tariffs for the first time when meeting with Spanish Prime Minister Sanchez in Beijing on Friday. He stated that China and Europe should jointly uphold the trend of economic globalization and the international trade environment, “resist unilateral bullying,” as there are no winners in a tariff war and opposing the world will only isolate oneself.
French Prime Minister Francois Bayrou expressed the view that the idea of China replacing the US as a trade partner is both naive and dangerous, urging EU member states to unite in the current global trade tension environment.
“The idea that China can replace the US is very dangerous,” Bayrou told reporters on Friday while visiting a cheese and wine trade fair.