China started collecting 125% duty on American goods: what’s next
China has begun to collect new duties on US imports from 125%, which has introduced in response to an increase in US for Chinese goods from 145%.
Responding have strengthened the global economic turmoil unleashed by President Donald Trump’s duties, causing chaos on world exchanges and a dollar drop and raising the price of gold to record levels on Friday.
A US consumer survey cited by Reuters showed that fears of inflation have reached their highest values since 1981, while financial institutions are predicting an increasing risk of recession.
Trump downplayed market turbulence, predicting that the dollar would intensify and assured that his duties would force countries to conclude commercial agreements with Washington. According to the White House, 75 countries have requested negotiations.
China almost stopped importing Hollywood films
Among them is the EU, which postponed its duties on American goods, even those planned in response to already operating US duties on the import of steel and aluminum, and sent its commercial commissioner to Washington for negotiation. Maros Shefchovic will remain in Washington over the weekend, though the European Commission said on Friday that he still had no scheduled conversations with US sales representatives.
| « When people understand what we are doing, I think the dollar will rise significantly, » he told reporters aboard the presidential plane late Friday. « The bond market is going well. There was a small moment, but I solved this problem very quickly. » |
Trade war
Increasing US and China customs duties can make an impossible trade in goods between the two largest economies in the world, analysts say. This trade was worth more than $ 650 billion in 2024.
| « We can do what we want, but we want to be fair. We can determine the tariff and they can choose not to deal with us or choose to pay it, » Trump said on board their aircraft, saying that the US duties are paid by foreign exporters. |
Although such fees can cause an exporter problem by making its products less competitive, duties are actually paid by the importer, who often transfers the additional costs to the consumer.
Trump, who said on Friday that he was pleased with the duties of China, suggested that the Beijing deal could also be outlined by praising his president Jinping despite their differences. But there are no signs that the two largest economies in the world are ready to retreat.
« The president said very clearly: when the United States is hit, he will respond more strongly, » White House press secretary Carolyn Leit told reporters on Friday.
The market responds by punishing both the dollar and the bond prices.
In the US, consumers’ trust has sharply reduced
Inflation data in the US has shown that price pressure has not yet increased, although the manufacturer price index for March has shown an increase in metals prices as a result of April raising duties on steel and aluminum imports.
| « If the duties remain in force, they will increase inflation significantly in the coming months, » said the chief economist of Commerica Bank Bill Adams, quoted by Reuters. |
The University of Michigan announced that the consumer attitudes index dropped to 50.8 this month from 57 in March.
Studies have also shown a weakening of trust in Republicans, as well as an increase in expectations for increasing inflation.
The Chinese reply
Unlike Europe, China continued with the introduction of customs duties, calling the Trump tax « completely unilateral harassment and coercion ».
Xi Jinping offered the EU Union against Trump’s trade war
Beijing said this would be the last time he responded to the US duties, but left the door open to other types of responding.
| « If the US really wants to negotiate, they must stop their capricious and destructive behavior, » Liu Peng, a spokesman for the Chinese Embassy in the United States, wrote on social media. |
Levitus, in turn, warned Beijing: « If China continues to avenge, it will not be good for China. »
On Thursday, Trump told reporters that he believes the United States can make a deal with China. On Friday, he made his first public remarks about Trump’s customs duties by saying to Spanish Prime Minister Pedro Sanchez in Beijing that China and the European Union should « jointly oppose unilateral acts of harassment. »
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