China increased its tariff on U.S. goods to 125% on Friday in a retaliatory measure against President Donald Trump’s 145% tariffs against China. 

China’s latest levy goes into effect on April 12. It comes after the Asian country raised tariffs on U.S. exports to 84% on Wednesday in response to Trump slapping Beijing with a 104% tariff that same day. With China being the third-largest export market in 2023 for the United States, the tariff will affect roughly $145 billion worth of American exports, particularly agricultural products such as oilseeds and grains, as well as oil and gas. 

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A statement from the Chinese Ministry of Finance suggested the 125% levy could be the last time China hikes tariffs on the U.S. 

“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 finance ministry said in a statement. 

“The U.S. alternately raising abnormally high tariffs on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the world economy. However, if the U.S. insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end,” the statement continued. 

During an interview Wednesday morning on Fox Business Network, Treasury Secretary Scott Bessent argued the escalation was a “loser” for Beijing and said, “It’s unfortunate that the Chinese actually don’t want to come and negotiate because they are the worst offenders in the international trading system.” 

TRUMP PAUSES TARIFFS FOR 90 DAYS ON DOZENS OF COUNTRIES, RAISES RATE ON CHINA TO 125%

“They have the most imbalanced economy in the history of the modern world,” he continued. “And I can tell you that this escalation is a loser for them, that they have some very smart — the economists, the academicians, technocrats within their bureaucracy — and they would be telling the leadership that we do not have the edge here. They are the surplus country, and their exports to the U.S. are five times our exports to China, so they can raise their tariffs, but so what?”

The escalating trade war is already having a real impact, with Tesla pausing orders for imported models in China and removing the option for Chinese buyers to order cars on its website Friday morning. Certain models will remain available in China if there is inventory.