Unwavering China responds to Trump, hikes US tariff to 125% in escalating trade war

China announced on April 11 that it would raise tariff on US goods from 84% to 125%, effective April 12.

This announcement came just hours after Chinese President Xi Jinping called on the European Union to join Beijing in resisting what he described as "unilateral bullying" from the United States.

His remarks referred directly to the tariff hikes imposed by US President Donald Trump, who had earlier raised tariffs on Chinese goods to 145%.

This development further inflamed the ongoing trade conflict between the two largest economies in the world.

In response to Washington’s actions, China’s finance ministry issued a statement explaining that any further tariff moves by the United States would be ignored, saying, "At the current tariff level, there is no possibility of market acceptance for US goods exported to China."

The ministry criticized the repeated rounds of tariff increases, saying, "The United States' imposition of round upon round of abnormally high tariffs on China has become a numbers game with no practical significance in economics."

A spokesperson reiterated that "if the US continues to play the tariff numbers game, China will ignore it."

China blamed the United States for the resulting instability in the global economy, accusing it of being responsible for widespread disruption.

A spokesperson for China’s Commerce Ministry said that the US tariffs had "(caused) the current world economy, global markets, and multilateral trading systems to suffer serious shocks and severe turbulence."

According to Beijing, Trump’s decision to temporarily halt tariffs on other countries came as a result of “pressure from China.”

Trump had earlier announced a 90-day pause on new tariffs for all countries except China while raising Chinese tariffs as a warning over what he described as a “lack of respect” from Beijing.

The US had already imposed a previous round of tariffs on April 9, which increased duties on Chinese imports to 104%.

In response, China hiked its tariffs from 34% to 84%, effective April 10, before the subsequent increase to 125%.

On the same day as China’s tariff hike announcement, Xi Jinping met with Spanish Prime Minister Pedro Sanchez in Beijing and used the meeting to emphasize that "there are no winners" in a tariff war.

Through the state news agency Xinhua, he urged the EU to collaborate with China to resist US pressure.

"China and Europe should fulfill their international responsibilities... and jointly resist unilateral bullying practices," Xi said, adding that this collaboration would help "safeguard legitimate rights and interests... but also safeguard international fairness and justice."

Despite the mounting tensions, Trump appeared to maintain a respectful tone toward Xi Jinping personally.

Speaking at the White House, Trump said, "I think President Xi is a man who knows exactly what needs to be done. He's a very smart man. He loves his country. I know that for a fact. I know him very well."

Trump remained optimistic that an agreement could still be reached, saying, "I think he's going to want to make a deal. I think that's going to happen. We'll get a phone call at some point, and everything will be ready." He added, "It is going to be a great thing for us, the world, and for humanity."

Aside from the conflict with China, the US also imposed new tariffs on other countries. On April 2, Trump announced a 27% reciprocal tariff on India.

While lower than the 34% on China and 46% on Vietnam, the Indian tariff was intended to give India a competitive edge in the American market. The move is part of a broader US strategy to address trade imbalances globally.

Tariffs on Thailand (36%) and Indonesia (32%) were higher than India’s, although India’s rate was still significant.

Compared to nations like Japan (24%), South Korea (25%), Malaysia (24%), the European Union (20%), and the UK (10%), India’s tariffs remained comparatively higher. Taiwan, a major chip manufacturer, faced a 32% tariff.

A White House fact sheet detailed a 10% tariff on all imports starting April 5. Trump defended his stance by pointing to historical imbalances.

He said, “We are only charging half the tariffs that other countries are imposing.”

Trump introduced a 26% tariff on Indian imports, claiming India’s cumulative tariff burden on American goods was 52%.

He framed the US response as restrained, saying, “They hit us with 52%, we’re hitting back with 26%. That’s just the beginning.”

A slide showed the tariff at 26%, though a separate annex initially listed it at 27% before it was corrected.

This India-specific measure was part of a larger effort to reshape global trade practices. Alongside it, Trump proposed a universal baseline tariff of 10% on all imports to encourage domestic manufacturing.

The impact was immediate: Indian exporters began facing delays as US buyers, reacting to the tariff increases, requested discounts of 15–25% on existing orders.

Although large retailers maintained long-term contracts, many buyers sought to shift the financial burden onto exporters.

Rahul Mehta, chief mentor at the Clothing Manufacturers Association of India (CMAI), said the tariff announcement had caused confusion among exporters.

With buyers hesitating or demanding renegotiations, industries like textiles and gems — both reliant on discretionary consumer spending — are feeling the pressure.

Trump’s 26% tariff on Indian goods went into effect on April 9, alongside a previously declared 20% tariff on China, later raised to 34%.

He also threatened to impose an additional 50% tariff on Chinese imports in response to Beijing’s warning of further retaliation.

Despite Trump referring to Indian Prime Minister Narendra Modi as "a great friend," he remained firm on tariffs, saying, “Their Prime Minister (Narendra Modi) just left the US recently. He is a great friend of mine, but I said to him, 'You're a friend of mine, but you've not been treating us right.' India charges us 52%, so we will charge them half of that—26%."

India reacted cautiously, saying it would study the impact of the US decision and evaluate how to respond.

Meanwhile, as global markets reeled from the trade war escalation, the Reserve Bank of India cut its repo rate by 25 basis points to 6% to support economic growth amid global uncertainty.

RBI Governor Sanjay Malhotra said, “The global economy is navigating a period of significant uncertainty,” referring to the US tariffs and their anticipated inflationary effect.

Despite the friction, India secured a 90-day reprieve from reciprocal US tariffs, announced alongside the US’s sweeping 125% duties on Chinese imports.

This grace period allows India to continue trade negotiations with Washington and could present strategic opportunities as global businesses begin reconsidering operations in China.

US Treasury Secretary Scott Bessent warned, however, that the pause did not signify immunity.

Countries like India, Vietnam, Japan, and South Korea might still face future tariffs. “It’s not just about China,” Bessent said. “It’s about bad actors. The US will see.”

Bessent criticized China, calling it “the most unbalanced economy in the history of the modern world,” reaffirming the US administration’s aggressive stance on correcting global trade inequities.