China’s 125% Tariffs: Escalating Trade Tensions Explained

Trump has postponed tariff increases for most nations, except China, for 90 days due to market volatility and recession concerns. Countries without retaliatory tariffs will only face a 10% tariff until July. In contrast, China will impose 84% tariffs on U.S. goods, prompting the U.S. to raise its tariffs on Chinese exports to 125%.

grownfolk Published: April 9, 2025 | Updated: May 3, 2025 2 min read

Trump has opted to postpone broad tariff hikes on most nations, excluding China, for an extended period of 90 days. This decision represents a notable shift from his prior hardline approach to global trade, a move likely influenced by recent financial market volatility and mounting fears of an economic recession. While initially unwavering in his trade policies, Trump announced that nations refraining from imposing retaliatory tariffs on the U.S. would be granted a temporary exemption from harsher measures. For now, these countries will only face a reduced 10% blanket tariff, with the policy slated to remain in effect until July.

In stark contrast, China is preparing to enforce massive 84% tariffs on American goods starting tomorrow. This development has prompted Trump to intensify the trade standoff, enacting a sharp increase in U.S. tariffs on Chinese imports. Effective immediately, these tariffs will soar to a staggering 125%, signifying a dramatic escalation in the already tense economic rivalry between the world’s two largest economies.

Closer to home, Mexico and Canada—two of the United States’ most vital trading partners—are also set to face the 10% tariff under the new measures rolled out by the Trump administration. Senior officials have stated that this decision could lead to heightened tensions within the North American trading bloc, further complicating relationships with neighboring countries.

Trump took to Truth Social to claim that “more than 75 countries” had initiated discussions with the federal government, seeking solutions in light of the administration’s steep tariff plans. He cited this outreach as evidence of the success of his strategy, though he did not provide any concrete details or substantiating proof to support the claim.

In the aftermath of the announcement, financial markets experienced a significant surge. The S&P 500 posted an impressive 8% gain, while the Dow Jones Industrial Average climbed 6.6%, reflecting increased investor confidence driven by the temporary halt to widespread tariff increases.

“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote. He reiterated his firm stance on trade as he unveiled this latest phase of his administration’s aggressive measures targeting China’s economic practices.