China has rebelled against the incumbent US President Donald Trump’s aggressive trade stance by raising tariffs on American goods to an extraordinary 125 percent. In a bold statement, Beijing dismissed Trump’s latest tariff hike as a “joke” and labelled it economic bullying that violates global trade norms. It dramatically escalates the long-running U.S.-China trade war and reopens old wounds reverberating through the global economy.
Trump just the other day announced that tariffs on Chinese goods would be raised up to 145 percent while dozens of different countries would be spared from tariffs, which drew an immediate denunciation from China’s Finance Ministry. The US imposition of excessively high tariffs on China seriously violates international economic and trade rules, runs counter to basic economic principles, and is simply an act of unilateral bullying and coercion. With the tariffs reaching economically to an irrational level above a 35 percent threshold, it typically wipes out profit margins. Economic pundits say the trade relationship between the world’s two largest economies has entered dangerous territory.
According to the Peterson Institute for International Economics, average U.S. tariffs on Chinese goods now stand at 135 percent, more than 40 times higher than before. It seems that the first round of trade wars started in 2018 for the first time. Meanwhile, China has increased the share of American goods subject to tariffs from 63 percent to 100 percent. Union Bank of Switzerland (UBS) analysts recently noted that Beijing’s latest announcement saying it would not match further US hikes signals the near-total collapse of bilateral trade. “There is little left to tax,” they observed.
Trade routes are being upended, diplomatic alliances reshaped, and the very architecture of international commerce strained. As Washington intensifies the stakes, Beijing is recalibrating, cultivating new partnerships, and declaring itself a power unwilling to back down. Whether this standoff results in dialogue or decoupling, one fact remains clear: global trade rules are being rewritten in real time.
Yet, China has made it clear it will not back down. While refraining from additional tariff increases, Beijing left the door open for alternative forms of retaliation. “Even if the USA continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics,” the Chinese Finance Ministry added. In recent weeks, China has begun deploying more symbolic and strategic tools. Restrictions on importing Hollywood films, travel advisories cautioning Chinese citizens against traveling to the USA, and warnings to students who might study at US universities reflect a change. The trade war widens and cuts into culture, education, and tourism.
During the standoff, China is doubling diplomatic efforts in Europe and Southeast Asia. President Xi Jinping, in his first public response, emphasized unity against “unilateral bullying.” During a meeting with Spanish Prime Minister Pedro Sanchez, he urged the European Union to resist economic coercion and support multilateralism. Xi is also set to visit Vietnam, Malaysia, and Cambodia, which are nations strategically vital to China’s regional influence. Talks are expected to focus on infrastructure cooperation, market access, and agricultural trade.
Meanwhile, Chinese Commerce Minister Wang Wentao has engaged with global trade leaders from the EU, ASEAN, Saudi Arabia, South Africa, and other BRICS and G20 nations. These efforts are part of an overarching goal in Beijing’s campaign to diplomatically isolate the USA and strengthen ties with the Global South. Notably, a breakthrough happened as China and the EU agreed to restart trade relief and electric vehicle pricing discussions, which may help mitigate long-simmering disputes and unlock new avenues for Sino-European cooperation.
Despite its hardline response, Beijing remains open to negotiations with the USA based only on mutual respect. “China is still open to negotiating, but threatening and pressuring is not the way to reach out to us,” the Commerce Ministry said. This approach mirrors China’s larger diplomatic strategy: engage but do not submit. As the tensions deepen, the US-China trade war is no longer merely an economic confrontation. It is a test of political will and world power.
Trade routes are being upended, diplomatic alliances reshaped, and the very architecture of international commerce strained. As Washington intensifies the stakes, Beijing is recalibrating, cultivating new partnerships, and declaring itself a power unwilling to back down. Whether this standoff results in dialogue or decoupling, one fact remains clear: global trade rules are being rewritten in real time.
