China retaliated against the Trump administration’s tariff hikes on Chinese goods by raising its import tax on U.S. goods to 125%, starting on April 12.
Saying the administration’s tariff initiative is a “joke,” the Chinese Ministry of Finance said this is the last time it will match U.S. tariff increases, which President Donald Trump has now set at 145% for virtually all goods coming from China.
“Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinese exports, China will disregard such measures,” the ministry said in a statement.
Chinese President Xi Jinping responded directly to the tariffs for the first time, saying that he does not fear the effects of the rapidly developing confrontation, adding that “there are no winners in a tariff war.”
China’s Ministry of Foreign Affairs was a bit more pointed, defiantly warning that China “will never bow to maximum pressure of the United States.” In a social media post, the ministry took aim at Trump’s effort, saying, “Give the bully an inch, he will take a mile.”
Hope for a deal? Trade experts say the tariffs imposed by both countries are so high right now that they could choke off most commerce between them, potentially causing enormous economic damage. The White House provided a glimmer of hope that there may be light at the end of the tunnel Friday, as White House press secretary Karoline Leavitt told reporters that the president is “optimistic” that the U.S. and China can strike a deal.
That slender thread of hope reverberated on Wall Street, where investors have responded extremely negatively to Trump’s tariff plans, and was enough to send stocks higher, with the Dow Jones Industrial Average jumping 619 points and the S&P 500 climbing 1.8%.
Still, there’s no sign that talks have begun, let alone of a deal in the works. The White House is reportedly waiting for Xi to request a meeting, with Trump administration officials saying they will not reach out first. A spokesperson for the Chinese Commerce Ministry said Thursday that “the door to talks is open,” but added that “dialogue must be conducted on the basis of mutual respect and equality.” The spokesperson also warned that China will respond to any confrontations with the U.S. in kind, adding that “pressure, threats, and blackmail are not the right ways to deal with China.”
Melanie Hart, senior director of the Atlantic Council’s Global China Hub, told CNN that China is well-prepared for an escalating confrontation, even as Americans are confident that they have the upper hand. “Look at where they’re blacklisting US companies, hitting US farmers, cutting us off from critical minerals – that’s a toolkit that they’re very comfortable wielding,” she said. “They have experimented with it in many other countries. They’ve been developing it for years. They have a bunker that they’ve been building for this moment.”