BEIJING. China has raised tariffs on U.S. goods to 125%, retaliating against President Donald Trump’s decision to hike duties on Chinese imports. The move further escalates a trade war that analysts warn could cripple global supply chains and rattle already fragile markets.
The latest round of tariff hikes intensified economic uncertainty around the world. Despite a volatile week, U.S. stocks closed higher, but investors rushed to traditional safe havens. Gold prices soared to an all-time high, and benchmark U.S. 10-year Treasury yields posted their sharpest weekly increase since 2001. Meanwhile, the U.S. dollar weakened, reflecting shaken confidence in the American economy.
A recent U.S. consumer survey revealed that inflation fears have surged to their highest levels since 1981, raising further concerns about a possible recession. “Tarifflation will be much more important for the outlook than backward-looking data,” said Bill Adams, chief economist at Comerica Bank. “If tariffs stay in place, they will push inflation considerably higher in coming months.”
President Trump downplayed the economic fallout despite the turmoil, assuring the press that the U.S. dollar would rebound and predicting that trade negotiations with over 75 countries would soon stabilize the markets.
“When people understand what we’re doing, I think the dollar will go way up,” Trump told reporters aboard Air Force One on Friday. “The bond market’s going good. It had a little moment but I solved that problem very quickly.”
The White House emphasized that the president’s strategy is working, with several countries — including India and Japan — entering talks. Still, global leaders remain uncertain about how to navigate what has become the most significant disruption to international trade in decades.
In response to the latest U.S. tariffs, China’s Ministry of Finance condemned Trump’s approach as “completely unilateral bullying and coercion.” While Beijing suggested this would be the final tit-for-tat tariff increase, it left open the possibility of other forms of retaliation.
“If the U.S. truly wants to have talks, it should stop its capricious and destructive behavior,” said Liu Pengyu, spokesperson for the Chinese embassy in Washington, via social media. “China will never bow to maximum pressure of the U.S.”
The total value of trade between the U.S. and China was over $650 billion in 2024, but analysts now believe that volume could shrink dramatically. In a research note, UBS analysts described China’s statement as “an acknowledgement that trade between the two countries has essentially been completely severed.”
White House Press Secretary Karoline Leavitt echoed the administration’s firm stance, stating:
“The president made it very clear: When the United States is punched, he will punch back harder.”
When asked if China’s retaliation would provoke further responses from Washington, Leavitt warned:
“If China continues to retaliate, it’s not good for China.”
Meanwhile, U.S. Treasury Secretary Scott Bessent is reportedly monitoring the bond market closely. The yield on the 10-year Treasury note — which influences mortgage and other loan rates — rose nearly half a percentage point over the week.
Adding to these concerns, the University of Michigan’s Consumer Sentiment Index dropped to 50.8 in April from 57.0 in March, falling below economist expectations. Inflation expectations jumped to 6.7%, the highest since 1981, up from 5.0% in March — with confidence among Republican consumers also showing a decline for the first time in recent surveys.
In a rare comment, Chinese President Xi Jinping responded to the tariffs on Friday during a meeting with Spanish Prime Minister Pedro Sanchez in Beijing, stating that China and the European Union should “jointly oppose unilateral acts of bullying.”
While Trump has signaled optimism over the potential for a trade deal with China, both sides appear entrenched for now, with global markets caught in the crossfire of an escalating economic battle.
Si Venus L Peñaflor ay naging editor-in-chief ng Newsworld, isang lokal na pahayagan ng Laguna. Publisher din siya ng Daystar Gazette at Tutubi News Magazine. Siya ay isa ring pintor at doll face designer ng Ninay Dolls, ang unang Manikang Pilipino. Kasali siya sa DesignCrowd sa rank na #305 sa 640,000 graphic designers sa buong daigdig. Kasama din siya sa unang Local TV Broadcast sa Laguna na Beyond Manila. Aktibong kasapi siya ng San Pablo Jaycees Senate bilang isang JCI Senator.
- Venus L Peñaflorhttps://tutubi.ph/author/venusp/
- Venus L Peñaflorhttps://tutubi.ph/author/venusp/
- Venus L Peñaflorhttps://tutubi.ph/author/venusp/
- Venus L Peñaflorhttps://tutubi.ph/author/venusp/
