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Tit-for-tat U.S. and Chinese tariffs on each other’s goods are rising so fast it’s head-spinning. Here’s how the situation has spiraled since last week:
February and March: The new Trump administration imposes a combined 20% tariff on goods imported from China over its role in the international flow of precursor ingredients for fentanyl.
April 2: Citing the U.S. trade deficit with China, Trump announces an additional 34% tariff on Chinese goods.
April 4: China announces its own 34% tariff on U.S. goods.
Monday: Trump threatens to impose an additional 50% tariff if China doesn’t rescind its 34% tariff.
Wednesday: Trump follows through on his threat, bringing the total U.S. tariff on Chinese goods to 104%. China matches Trump’s 50% tariff with the same levy on U.S. goods, bringing its total to 84%. Trump further increases the total U.S. tariff to 125%.
Yesterday: The White House clarifies that the 125% tariff doesn’t include the 20% fentanyl tariffs from February and March, bringing the actual total to 145%.
Today: China says it is raising its tariff on U.S. goods to 125%, matching the tariffs Trump has imposed since last week.
Economists and other experts say at this point it almost doesn’t matter whether U.S. and Chinese tariffs on each other keep rising, as they are already so high they make trade between the world’s two biggest economies impractical.
That was reflected in the Chinese government’s announcement on its latest tariff increase.
“Given that, at the current tariff level, U.S. exports to China are no longer commercially viable, China will not respond to any further tariff hikes by the U.S. on Chinese goods,” it said today.
Reporting from Hong Kong
China’s Ministry of Commerce today blasted Trump’s 145% tariffs on Chinese goods as a “numbers game with no real economic significance.” The U.S’s tactics of weaponizing tariffs have become “a joke,” it said in a statement.
“If the U.S. keeps playing the numbers game of tariffs, China will ignore it,” the ministry added, but vowed once again to “fight to the end” if the U.S. “insists on substantially harming China’s interests.”
China raised its tariff on U.S. imports today to 125% from its previous rate of 84%, signaling that this is likely to be its last increase for the moment as tit-for-tat tariffs reach levels that make trade between the world’s two biggest economies unfeasible.
“Given that, at the current tariff level, U.S. exports to China are no longer commercially viable, China will not respond to any further tariff hikes by the U.S. on Chinese goods,” the ministry said.
Reporting from Hong Kong
China says it will reduce imports of American films in retaliation for the U.S. slapping tariffs on its goods. The move targets one of the United States’ most influential export industries.
China, the world’s second-biggest box office after the U.S., has long had an annual quota on the number of foreign films that can be screened in its theaters. Hollywood films have also fared less well with Chinese moviegoers in recent years amid rising U.S.-China tensions and a maturing Chinese film industry.
“The U.S. government’s erroneous imposition of tariffs on China is bound to further reduce domestic audiences’ favorable perception of American films,” the China Film Administration said in a statement yesterday.
The statement added that the number of American films imported would be “moderately reduced,” but did not specify the extent of the cut.
The impact on the U.S. box office may be limited. China contributed only 5% to Hollywood’s global box office revenue in 2024, according to Film Threat chief editor Alan Ng.
A total of 39 American films were released in Chinese theaters in 2024, accounting for about 15% of the country’s total box office revenue. Local media cited industry analysts who estimate that only 10 to 20 U.S. movies will be imported into China this year.
Reporting from Hong Kong
China and the European Union must join forces in defending free trade and opposing “unilateral bullying,” Chinese President Xi Jinping said, referring to Trump’s tariffs.
“China and the E.U. should fulfill their international responsibilities, jointly maintain the trend of economic globalization and the international trade environment, and jointly resist unilateral bullying,” Xi told Spanish Prime Minister Pedro Sánchez in Beijing today, according to a Chinese government readout.
They were Xi’s first public comments on the issue since Trump announced tariffs on a long list of U.S. trade partners last week, most of which he later paused for 90 days except for those on China. Xi did not explicitly mention Trump.
Sanchez said after his meeting with Xi that China and the U.S. should address their escalating trade tensions through dialogue. He also called for a more balanced trade relationship between China and the E.U., which are the world’s second- and third-biggest economies after the U.S.
European Union leaders are planning to travel to Beijing in late July for a summit with Chinese President Xi Jinping, The South China Morning Post reported, as Trump’s tariffs push the two major markets closer together.
No date has been confirmed with the Chinese side, the Hong Kong-based newspaper reported, citing five people familiar with the arrangement.
China and the E.U., which are marking 50 years of diplomatic relations, held their last summit in Beijing in 2023. The next one is scheduled for July but was supposed to be held in Europe, suggesting that E.U. leaders are anxious to meet with Xi directly.
In addition to their shared opposition to Trump’s tariffs, Europe is worried that it will be flooded with cheap Chinese exports if the tariffs divert them away from the U.S.
Democrats are at a crossroads. And different potential party leaders are already scoping out different potential paths back to power in a few years.
After the party lost November’s presidential election, its image has slipped to historic lows, and it lacks significant power in Washington to push back against Trump’s efforts to bend the federal government to his will — even as Democratic voters warm to the idea of an all-out fight against Trump.
It’s against that backdrop that key Democratic leaders are making early, yet important, moves about how to position themselves as the party looks toward a wide-open 2028 presidential race. Some seek to resist Trump at all opportunities, others concede victories to Republicans on cultural issues, and still more hope to split the difference — working with Trump when necessary and criticizing him when they disagree.
Read the full story here.
The week looks set to end much as it began, with global markets convulsing as Trump’s tariffs raise fears of recession.
Asia-Pacific markets were mixed, with U.S. ally Japan’s Nikkei 225 losing the most at 2.96%. Hong Kong’s Hang Seng Index and China’s CSI 300 both ended the day higher before China’s tariff increase announcement.
In Europe, major markets were all lower, led by Germany’s Dax which was down almost 1.7% in morning trading.
The dollar fell to its lowest in 10 years against the Swiss franc and its lowest in six months against the yen, Reuters reported, as the euro reached its highest level against the U.S. currency since February 2022 and gold hit another record high.
U.S. stock futures were all down between 0.6% and 0.7% as of 5 a.m. ET, after China announced it would raise its tariff on U.S. goods to 125%. The three major U.S. averages all closed lower yesterday, reversing some of their gains from a historic rally Wednesday after Trump announced a 90-day pause on higher targeted tariffs on all countries except China.
China is raising its tariff on U.S. imports to 125% from its previous rate of 84%, signaling that this is likely to be its last increase for the moment as tit-for-tat tariffs reach levels that make trade between the world’s two biggest economies unfeasible.
“Given that, at the current tariff level, U.S. exports to China are no longer commercially viable, China will not respond to any further tariff hikes by the U.S. on Chinese goods,” the government said in a statement today.
Trump said Wednesday that the combined tariff on Chinese goods would rise to 125%, after China refused to rescind retaliatory tariffs on U.S. goods that matched ones Trump earlier announced. The White House clarified yesterday that the total U.S. tariff on Chinese goods is now 145%, including 20% in additional tariffs that Trump imposed in February and March.
The 125% Chinese tariff on U.S. goods takes effect tomorrow.
Reporting from Washington
“Liberation Day” gave way to Capitulation Day on Thursday.
President Donald Trump pulled back Wednesday on a series of harsh tariffs targeting friends and foes alike in an audacious bid to remake the global economic order.
Trump’s early afternoon announcement followed a harrowing week in which Republican lawmakers and confidants privately warned him that the tariffs could wreck the economy. His own aides had quietly raised alarms about the financial markets before he suspended a tariff regime that he had unveiled with a flourish just one week earlier in a Rose Garden ceremony.
The stock market rose immediately after the about-face, ending days of losses that have forced older Americans who’ve been sinking their savings into 401(k)s to rethink their retirement plans.
Read the full story here.
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