China Imposes 125% Tariffs on US Imports Amid Escalating Trade Dispute

Beijing escalated trade tensions with Washington on Friday by raising tariffs on U.S. goods to 125%, a direct response to the Trump administration’s decision to increase duties on Chinese imports to 145%.

The move intensifies a protracted trade conflict that analysts warn could destabilize global supply chains and economic stability.

The White House had previously paused tariff hikes on dozens of trading partners while maintaining pressure on China, the second-largest economy and a major source of U.S. imports. China’s Finance Ministry condemned the U.S. measures in a statement, calling them “unilateral bullying and coercion” that violate international trade norms and “basic economic laws.”

Global financial markets reacted with heightened volatility. U.S. stock indices edged upward modestly, while European shares dipped and Japan’s Nikkei 225 fell 3% by the week’s close. Currency markets mirrored the uncertainty: the U.S. dollar slumped to its weakest level since 2022, while the euro climbed to a three-year high.

In addition to tariff increases, China filed a formal complaint with the World Trade Organization (WTO), accusing the U.S. of coercive trade practices. Retaliatory measures extended to key American exports, including coal, liquefied natural gas, crude oil, agricultural machinery, and large-displacement vehicles.

The ongoing dispute underscores deepening fissures in international trade relations, with both nations adopting increasingly confrontational stances. Economists caution that further retaliatory actions could disrupt manufacturing networks, inflate consumer prices, and strain diplomatic ties. Historical precedents, such as the 2018-2019 tariff wars, suggest prolonged conflicts risk broader economic slowdowns, though some sectors may adapt through supply chain diversification. As negotiations remain stalled, the focus shifts to whether multilateral institutions like the WTO can mediate before collateral damage spreads.