China raised its tariffs on U.S. goods up to 125 percent Friday and predicted that the U.S. economy will become “a joke” in the eyes of the world if President Trump continues to pursue his trade war.
The announcement from Beijing comes after Trump’s Wednesday announcement that he would roll back higher reciprocal rates on all U.S. trading partners, save for China, which he slapped with an additional 20 percent tariff, bringing the total levy to 145 percent.
Beijing’s finance ministry mocked the U.S. for increasing tariffs on Chinese goods and suggested the American economy would become a laughing stock.
“Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the ministry said.
“If the U.S. continues to play the tariff numbers game, China will ignore it. However, if the U.S. insists on continuing to substantially infringe on China’s interests, China will resolutely counterattack and fight to the end.”
The messaging is consistent with Beijing’s warnings that it is willing to fight a trade war against the U.S. if that is what the Trump administration desires.
White House press secretary Karoline Leavitt told reporters Friday that 75 countries have reached out to the U.S. to begin trade negotiations while 15 countries have already offered terms. Asian countries including Japan, South Korea, and Vietnam have had talks with the White House to discuss tariffs and other issues, as the U.S. attempts to maintain its longstanding allies in the region while isolating China.
Tensions between the world’s two largest economies have risen at the same time that Trump declared war on the broader global trading system. Trump announced last week a global tariff package consisting of a 10 percent minimum tariff and much higher tariff rates on select countries that have large trade surpluses with the U.S.
Trump’s tariff package caused a mutiny on Wall Street, plunging markets to lows not seen since the start of the Covid-19 pandemic five years ago, until he announced a 90 day pause on most of the tariffs. Markets surged immediately after the pause, before slumping again because of the remaining uncertainty and escalatory trade war with China.
If Trump’s tariffs persist, most economists and financial analysts expect the measures to dramatically increase consumer prices and reduce economic growth. Trump and his team believe the tariffs are necessary to rebuild American manufacturing and end decades of unfair trade practices against the U.S.
Leavitt also suggested that President Trump is open to a deal with China and said China’s continued retaliation is a big mistake for their economy. Trump has long been a critic of Chinese trade practices and imposed selective tariffs on China during his first term.
This time around, Trump began tariffs on China with two 10 percent increments to punish Beijing for failing to mitigate the flow of fentanyl out of the country and into Mexico, where it typically goes before crossing the U.S. southern border. As part of Trump’s global tariff package, he added 34 percent tariffs onto China, a move that began the latest string of retaliatory escalations.