The escalating trade war between China and the United States took a dramatic turn on April 11th, as the Chinese government announced a significant increase in tariffs on American goods to 125%. The ongoing trade dispute between the two economic giants has led to a rapid deterioration in trade relations, with coastal export provinces in China such as Guangdong and Zhejiang experiencing shipping delays and mounting container backlogs at ports in Guangdong and Shanghai.
This deteriorating situation has sparked a wave of pessimism among the public, with some even engaging in self-deprecating humor online, including discussions on “how to eat tree bark” as a response to the escalating tensions. Some individuals have pointed out that if China mishandles the situation, it could lead to a collapse.
According to the Chinese State Council Tariff Commission, on April 10th, the U.S. government announced a further increase in tariffs on Chinese goods to 125%. Effective April 12th, China will adjust its retaliatory tariffs on imported U.S. goods from 84% to 125%. As a result of these escalated tariffs, Chinese goods may no longer be viable in the American market, leading to a standoff between the two countries.
The news of the increased tariffs quickly became a hot topic online, sparking discussions among netizens. Comments such as “This is the end of trade between the two sides” and “Relations between China and the U.S. have hit an all-time low” reflected the gravity of the situation.
President Trump signed an executive order on April 2nd, initiating a global policy of “reciprocal tariffs” aimed at addressing the long-standing trade imbalances faced by the United States. Under this policy, the U.S. would impose at least a 10% tariff on major economies worldwide. In the case of China, identified as a “serious violator,” the U.S. planned to levy a 34% reciprocal tariff, which came into effect on April 9th.
In response, China retaliated by imposing a 34% retaliatory tariff on U.S. goods starting on April 10th, with the declaration that they would “play along to the end.” President Trump then threatened to increase tariffs on Chinese goods by an additional 50% unless China revoked its decision. This back-and-forth escalation has caused turmoil within the Chinese manufacturing sector, as industry insiders describe navigating turbulent waters.
Subsequently, the White House announced on April 9th that the U.S. would impose an additional 50% tariff on Chinese goods, bringing the new tariff rate on all Chinese products in Trump’s second term to 104%.
On the evening of April 9th, the Chinese State Council Tariff Commission declared that starting at 12:01 a.m. on April 10th, tariffs on all imported U.S. goods would be increased from 34% to 84%. In retaliation, the U.S. announced on April 10th that tariffs on Chinese goods would be raised to 125%. Trump also temporarily reduced the reciprocal tariffs imposed on 75 other countries to 10% for 90 days.
Citing China’s lack of respect for the global market, Trump announced the increase in the reciprocal tariff rate for China from 84% to 125%, adding to the existing 20% tariff that had been in effect since March 4th. Officials confirmed that the total tariff rate on Chinese imported goods now reached 145%.
The escalating trade war has had a profound impact on China’s export chain, with significant disruptions seen in key export provinces such as Zhejiang and Guangdong, where factories have come to a standstill and warehouses are overflowing with goods originally intended for export. Public sentiment has soured, with discussions on how to cope with the challenges emerging online.
According to reports from media outlets such as “Caixin,” the reciprocal tariff policies have led to the cancellation of numerous freight and cargo flights on major China-U.S. routes, with exporters halting shipments and the bustling export scene at Shanghai Port coming to a sudden halt in a matter of days.
The air cargo market has also taken a hit, with one freight agent in South China revealing that general trade cargo to the U.S. would see a 90% reduction in the coming week, as major carriers have significantly cut back cargo flights. The sudden imposition of high tariffs has forced exporters and customers to renegotiate cost sharing, resulting in many goods being temporarily suspended from shipping.
Mr. Qian, an exporter from Guangdong currently on a business trip in Shanghai, reported a similar situation at Yantian Port in Guangdong, with container ships for exports scarce and piles of containers stacking up at the port.
Wang Xin, head of the Cross-border E-commerce Association in Shenzhen, stated to local media that the high tariffs constituted an unprecedented shock to the industry. The increased tariffs would fundamentally alter cost structures, lead to longer customs clearance times, higher logistics costs, and make it extremely challenging for Chinese sellers to survive in the U.S. market. She warned that the trade war’s impact on small and medium-sized enterprises could result in a surge in domestic unemployment rates.
Public sentiment within China has continued to deteriorate, with internet users engaging in discussions on coping strategies such as “how to eat tree bark.”
Mr. Hong from Jiangsu shared with Radio Free Asia that a sense of pessimism was brewing among the public, with individuals across different age groups expressing negative emotions. Mr. Zhang from Qingdao, Shandong, noted the economic downturn affecting various industries and the helplessness prevalent among the population. He pointed out that the impact of the tariff war had stalled progress in the technology and economic sectors in Guangdong and Zhejiang, highlighting the risk of a collapse if the situation was mishandled.