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US trade war with China grows more bloody as Trump ups the ante once more

The White House has signalled the US has no intention of backing down, with the US responding by calling China back to the negotiating table.

New cars waiting for shipment to overseas markets at a port in Taicang in eastern China's Jiangsu province, Monday, April 7, 2025. (Chinatopix Via AP)
Image: New cars waiting for shipment to overseas markets at a port in Taicang in eastern China's Jiangsu province. Pic: Chinatopix via AP
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The US has increased tariffs on Chinese goods to 125%, as the tit-for-tat trade war with America's biggest competitor hots up.

Stock markets will now be braced for more retaliation from China, following Wednesday's announcement of additional tariffs on US goods.

Those are due to come into into force on Thursday.

It means tariffs of 84% will be enforced on US goods - up from the 34% China had previously planned, but they could still go higher.

Tariffs latest: Trump claims world 'kissing my a**' for deals

As part of a new complaint to the World Trade Organisation, China said the United States' decision to impose tariffs threatened to further destabilise global trade.

"The situation has dangerously escalated," China said in a statement.

"As one of the affected members, China expresses grave concern and firm opposition to this reckless move."

Trump tariffs timeline

The White House has signalled the US has no intention of backing down, with the US responding by calling China back to the negotiating table.

Treasury Secretary Scott Bessent had described China's retaliatory tariffs as "unfortunate" and a "loser" for China.

The enormity of this trade war has barely sunk in

Helen-Ann Smith, news correspondent
Helen-Ann Smith

Asia correspondent

China was always going to retaliate and when it did, it was decisive.

Its retaliatory tariffs matched with the US like-for-like and it has imposed restrictions on 18 US companies.

When taken in addition to levies that were already in place, import taxes between the US and China are now so high that trade between the two is all but impossible.

The enormity of the world's two biggest economies essentially ceasing to trade has barely sunk in.

There is a genuine belief at the top levels of the Chinese system that the US's ultimate goal is to restrain China and undermine its growth, in that context capitulating to Trump serves no purpose and just isn't an option.

But there is a sense that there was a degree of restraint behind the rage.

In the end, the measures mainly targeted trade and some of the more political options that would have seriously raised the stakes were avoided.

Perhaps China really does want to avoid escalation or perhaps it wants to leave some option open for later.

This moment does mark a real low in US-China relations, because throughout the years, despite all the strife and disagreement, trade was always there as a backstop, the one issue which inextricably linked them.

Without that, it's unclear what could come next.

Mr Bessent said in an interview with Fox Business Network: "I think it's unfortunate that the Chinese actually don't want to come and negotiate, because they are the worst offenders in the international trading system.

"Their exports to the US are five times our exports to China. They can raise their tariffs, but so what?"

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The European Union is in discussion about its own retaliatory measures.

The European Commission said on Wednesday it had secured backing from EU countries and would press ahead with a first set of countermeasures from 15 April against US President Donald Trump's 25% import tariffs on steel and aluminium.

The 27-nation bloc will put in place extra duties mostly of 25% on a range of US imports in response specifically to the US metals tariffs. It is still assessing how to respond to the car and broader levies.