China has increased tariffs on United States goods to 125%.
China increased the levies on Friday hitting back at United States President Donald Trump’s decision to single out the world’s No.2 economy for higher duties, while dismissing the U.S. president’s tariff strategy as “a joke”.
Investors had been waiting to see how China would respond to Trump’s move on Wednesday to effectively raise tariffs on Chinese goods to 145% while announcing a 90-day pause on duties on dozens of other countries’ goods.
The yuan slipped to levels last seen during the global financial crisis on Thursday but rebounded slightly on Friday.
“The U.S. side’s imposition of excessively high tariffs on China seriously violates international economic and trade rules, runs counter to basic economic principles and common sense, and is simply an act of unilateral bullying and coercion,” China’s Finance Ministry said in a statement on Friday.
The tit-for-tat increases stand to make goods trade between the world’s two largest economies impossible, analysts said, with import duties above around 35% wiping out Chinese exporters’ profit margins and making American offerings in China similarly overly expensive.
China said on Friday that this would be the last time it matched the U.S., in the event that Trump takes his tariffs any higher.
The Finance Ministry added: “Even if the U.S. continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics.
“If the U.S. continues to play a numbers game with tariffs, China will not respond.”
However, it left the door open for Beijing to turn to other types of retaliation, reiterating that China would fight the U.S. to the end, Reuters reported.
Both sides now tax 100% of each other’s goods, after China increased the percentage of two-way trade it subjects to taxes from 63% on April 9, following the U.S. broadening the scope of its duties from 67% in February.
Average U.S. tariffs on Chinese exports now stand at 135%, according to the Peterson Institute for International Economics, more than 40 times higher than before the first U.S.-China trade war kicked off in 2018.
