U.S. and China Trade War Heats Up Again with Higher Tariffs

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China’s finance ministry said that higher U.S. tariffs no longer make economic sense at this point and have made American goods too expensive for the Chinese market. (Pexels Photo)

Tensions between the U.S. and China over trade have flared up again. On Friday, China raised tariffs on American goods from 84% to 125% in response to new U.S. tariffs. The U.S., under former President Donald Trump’s executive order, had recently increased its own tariffs on Chinese goods to a total of 145%, including earlier charges tied to fentanyl-related products.

China’s finance ministry said that higher U.S. tariffs no longer make economic sense at this point and have made American goods too expensive for the Chinese market. They also warned that China would stop responding if the U.S. keeps raising tariffs.

Experts say tariffs have reached a breaking point for both countries. Zhiwei Zhang, a leading economist, noted that it’s time to focus on the damage these trade policies are doing rather than raising rates further. There is little chance that the two sides will start negotiating again soon.

Unlike past responses, China has not yet taken other strong actions like limiting exports or punishing more American companies. China says it will respond if the U.S. continues to hurt its interests.

The economic effects are already visible. Goldman Sachs has lowered its growth forecast for China to only 4% this year. The trade conflict could threaten millions of Chinese jobs linked to exports to the U.S. Meanwhile, American businesses are facing higher costs and supply chain disruptions.

U.S. Treasury Secretary Scott Bessent called China “the worst offender” in global trade and claimed that China’s economy is unstable. But many experts argue that both sides are losing in this trade war—and that the damage could keep growing without real talks.

Chinese President Xi Jinping also commented this week, warning that “no one wins in a tariff war” and urging the global community to support open trade and cooperation.