China has announced it will tax U.S. products at 125 percent but it won’t go any higher because President Donald Trump’s escalating duty rates have become an economically meaningless “joke.”
Trump had announced 145 percent tariffs on products from China as part of an escalating trade war between the world’s two largest countries. On Friday, Beijing retaliated by raising its tariffs of 84 percent on American goods 41 percent but said it would ignore any more increases on Trump’s part.
“Given that American goods are no longer marketable in China under the current tariff rates, if the U.S. further raises tariffs on Chinese exports, China will disregard such measures,” the Ministry of Finance said in a statement.
The Commerce Ministry said in a separate statement that the numbers no longer had any “economic significance” and were just a “tool of bullying and coercion” that had turned the U.S. into a “joke.”
The announcement caused S&P 500 futures to fall slightly and weighed on European markets. The FTSE 100 fell by 0.2 percent and the DA index was down 1.2 percent. The U.S. dollar also fell to its weakest level against the euro since 2022.
The president’s April 2 tariff “Liberation Day” announcement had hit Chinese products with a 10 percent universal tariff and 34 percent “reciprocal” tariffs. Those were on top of an existing 10 percent tariff on Chinese products plus any applicable sector-specific tariffs.
The duties are an import tax paid by American companies with the costs typically passed on to consumers.
Days later, China responded with its own 34 percent reciprocal tariffs on American goods, which Trump countered with another 50 percent increase on Chinese products, prompting Beijing to retaliate with 84 percent tariffs.
Although it has ruled out new tit-for-tat tariffs, China has taken other measure to strike at U.S. interests.
On Wednesday, it cautioned citizens not to travel to the U.S. and warned Chinese students not to study in “certain U.S. states,” according to Bloomberg. On Thursday, it limited the number of U.S. films that can play in Chinese theaters.
The country has repeatedly vowed that “If the U.S. insists on going its own way, China will fight to the end.”
In the meantime, Trump has returned to threatening Mexico in his trade war. Under a decades-long agreement between the two countries, Mexico is supposed to send Texas farmers a certain amount of water every five years, according to Reuters.
But after three years of drought, the country has been unable to meet the quota.
“Mexico OWES Texas 1.3 million acre-feet of water under the 1944 Water Treaty, but Mexico is unfortunately violating their Treaty obligation,” Trump wrote in a post on Truth Social.
“My Agriculture Secretary, Brooke Rollins, is standing up for Texas Farmers, and we will keep escalating consequences, including TARIFFS and, maybe even SANCTIONS, until Mexico honors the Treaty, and GIVES TEXAS THE WATER THEY ARE OWED!” he added.
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