China responds firmly to escalating US tariffs by 125%, calls for global unity against unilateralism

Department of Research, Studies and International News 11-04-2025

In a decisive move signaling Beijing’s resolve to defend its economic sovereignty, China has raised tariffs on US imports to 125%, a direct counter to Washington’s aggressive escalation in its ongoing trade war. This action, announced by the Chinese Ministry of Commerce, follows the White House’s clarification that the total US tariff burden on Chinese goods now stands at 145%, including an additional 20% levy purportedly linked to fentanyl enforcement.

President Xi Jinping, during recent diplomatic engagements with European and Global South leaders, reaffirmed China’s commitment to multilateralism and global trade stability. In talks with Spanish Prime Minister Pedro Sánchez, Xi extended a call for greater EU-China collaboration in resisting what he termed “unilateral bullying,” a clear reference to the United States’ disruptive trade tactics.

“There are no winners in a tariff war,” Xi warned, emphasizing that acting against global consensus would only lead to isolation. He urged the European Union and other key players to uphold international trade norms, protect legitimate rights and interests, and jointly resist actions that threaten global economic fairness and stability.

China’s tariff increase, from an already significant 84% to 125%, was described as a calibrated response, with officials suggesting this may be the final escalation in the tariff exchange, given the diminishing viability of US exports in the Chinese market under current conditions. “There is no market acceptance for US goods at this level,” the ministry stated, adding that further provocations from Washington would be met with alternative countermeasures.

The backdrop to these developments is one of global financial unease. Markets have been roiled by uncertainty, with Asian indices plummeting and oil prices declining for a second consecutive week. Despite a temporary pause on US tariffs affecting dozens of other countries, China was notably excluded, underscoring the targeted nature of Washington’s approach.

European leaders have expressed skepticism over the stability of the US’s 90-day tariff suspension. French President Emmanuel Macron characterized the pause as “fragile,” highlighting the volatile environment businesses now face. EU Commission President Ursula von der Leyen echoed this sentiment, warning that counter-tariffs could return if negotiations with the US falter.

China, meanwhile, is actively strengthening diplomatic ties across continents. In addition to Spain, Xi has held discussions with leaders from Saudi Arabia, South Africa, and is planning visits to Vietnam and Cambodia. This diplomatic outreach reflects Beijing’s broader strategy of building resilient economic alliances beyond the traditional Western bloc.

While the US administration claims to be negotiating with several nations, concrete results remain elusive. Even countries like Vietnam and Taiwan, which have shown willingness to engage in talks, have stopped short of committing to Washington’s demands. In fact, ASEAN countries have pledged not to retaliate against the US tariffs, but remain cautious about their long-term trade positions.

In stark contrast to the aggressive posturing from Washington, China has reiterated its openness to dialogue, provided that it is based on mutual respect and equality. “We will never sit idly by while our legitimate rights are infringed,” declared Foreign Ministry spokesperson Lin Jian. Beijing has already imposed restrictions on 18 US firms and curtailed the import of Hollywood films, signaling that its measures are not solely tariff-based.

Despite his increasingly hostile trade policy, US President Donald Trump has continued to speak optimistically about reaching an agreement with China. At a recent cabinet meeting, Trump referred to Xi as a longtime “friend” and expressed hope for a mutually beneficial deal. However, his actions, ranging from erratic tariff decisions to inflammatory rhetoric, cast doubt on Washington’s true intentions.

The economic fallout in the United States has been immediate. Major stock indices have plummeted, with the S&P 500 down over 5% and the tech-heavy Nasdaq losing more than 6%. The market volatility has revived recession fears, with some estimates placing the risk as high as 45%. US-based multinationals, especially those with significant manufacturing operations in China, such as Apple, are among the hardest hit.

Experts warn that the current 145% US tariff level essentially halts bilateral trade, disrupting global supply chains and threatening economic stability worldwide. “At this point, trade between the US and China becomes practically unfeasible,” said Deborah Elms of the Hinrich Foundation. This breakdown not only harms American businesses and consumers but also destabilizes the broader international economic order.

As the world’s second-largest economy, China has demonstrated restraint and strategic foresight throughout this trade conflict. Its latest response underscores both its capacity and willingness to safeguard national interests while continuing to advocate for cooperative, rules-based global commerce. The message from Beijing is clear: China will stand firm, but the door remains open to fair and respectful dialogue.