China has imposed a 125% tariff on US imports, escalating trade tensions between the two nations. This dramatic increase from the previous 84% rate mirrors the current US tariff on Chinese goods.
The move follows US President Donald Trump’s announcement of a 90-day pause on higher tariffs for dozens of countries, but notably excludes China.
The latest development is part of an ongoing trade dispute, with the US having already increased tariffs on Chinese goods to 125%. Earlier this month, President Trump introduced a baseline tariff of 10% on all countries, reserving higher rates for what he termed “worst offenders”.
Although the elevated rates are suspended for 90 days, a reciprocal tariff of 10% will apply in the interim. Trump emphasized that the tariff on China will still surge to 125%, citing “the lack of respect that China has shown to the world’s markets”.
This tit-for-tat escalation has significant implications for global trade, affecting various sectors such as electric vehicles, semiconductors, solar cells, and medical equipment.
The US had previously targeted specific sectors where it aims to boost domestic production. Tariffs on electric vehicles from China have skyrocketed to 100%, with lithium-ion batteries and other battery parts also facing increased tariffs.
Tariffs on semiconductors have doubled to 50%, impacting the global tech industry. Tariffs on solar cells have increased to 50%, affecting the renewable energy sector. Tariffs on medical equipment, including syringes, needles, and medical gloves, have risen, impacting healthcare and pharmaceutical industries.
Ultimately, as trade tensions continue to escalate, the global economy may face increased volatility and uncertainty. The US and China are engaged in a delicate dance of tariffs and counter-tariffs, with far-reaching consequences for international trade and commerce.
