U.S. tariffs on Chinese imports raised to 145%
China enacts 125% retaliatory tariffs on U.S. goods
Virtually all traded goods are now subject to tariffs
WTO forecasts up to 80% decline in bilateral trade volume
China deepens ties with Southeast Asia and the EU, bypassing the U.S.
Opinion
Beijing appears to be shifting its strategy from matching tariffs to preparing for a long-term diplomatic and economic standoff. Xi Jinping’s direct remarks and new trade diplomacy with the EU suggest that China is pivoting from bilateral confrontation toward multilateral resilience.
Core Sell Point
The tariff war has escalated to a level that threatens real-world trade flow disruption, with mounting long-term risks to global supply chains and export-reliant sectors. Investors should brace for persistent uncertainty across international trade-sensitive assets.
The U.S.–China tariff confrontation has entered a new structural phase. Following U.S. President Donald Trump’s decision to raise tariffs on Chinese goods to as high as 145%, China responded on April 12 by imposing retaliatory tariffs of 125% on U.S. imports. With nearly all traded goods now subject to high reciprocal tariffs, analysts warn that bilateral trade has effectively stalled.
China’s Ministry of Finance condemned the U.S. actions as "unilateral bullying" that violates international trade norms, hinting at a strategic shift away from tit-for-tat escalation. UBS noted that Beijing’s messaging reflects a recognition that continued tariff escalation yields diminishing returns, given the near-total collapse of trade flows.
For the first time, President Xi Jinping addressed the trade conflict publicly, stating during a summit with the Spanish Prime Minister that “China has never depended on the favors of others” and is “ready to fight against oppression.” The rhetoric signals that Beijing is preparing for a protracted standoff. China is also strengthening diplomatic ties, planning a Southeast Asia tour this month and resuming electric vehicle price negotiations with the EU—moves interpreted as part of a multilateral coalition-building effort that excludes the U.S.
Meanwhile, the World Trade Organization (WTO) warned that the ongoing trade war could cut U.S.–China trade volumes by up to 80%. In addition to tariffs, non-tariff retaliation has already begun, including restrictions on American films and delays in student visas—indicating that the conflict is spilling over into broader economic and cultural arenas.
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