On April 11, 2025, China fired back at the United States in the growing trade war. The Chinese government raised tariffs on U.S. goods from 84% to 125%. This was a direct response to former U.S. President Donald Trump, who had increased tariffs on Chinese goods to 145% just days earlier.
China Calls U.S. Policy a “Joke”
China’s Ministry of Finance did not hold back. Officials called the U.S. move a “joke” and said China had no choice but to defend itself. While they are ready to fight back when needed, they said they won’t go beyond 125%.
Why? Because higher tariffs could hurt the economy more than help it. Chinese officials said the global market won’t accept heavily taxed U.S. goods, so more hikes don’t make sense right now.
Markets Feel the Heat
The back-and-forth between the world’s two largest economies shook financial markets. The Dow Jones Industrial Average dropped 254 points (0.6%) on April 11. This came after a huge 1,014-point drop the day before.
Other markets also felt the hit. The S&P 500 slipped by 0.5%, and the Nasdaq dipped 0.2%. Investors are clearly worried. Trade wars often cause economic slowdowns, and the global economy is already fragile.
China Looks Elsewhere for Trade Partners
While tensions rise with the U.S., China is reaching out to other countries. President Xi Jinping has met with Spain’s Prime Minister. He also plans to visit several Southeast Asian nations in the coming weeks.
China is also planning a major summit with European Union leaders in July. The goal? To build stronger trade ties and reduce its dependence on the U.S. market.
U.S. Turns to Smaller Trade Deals
Meanwhile, the Trump administration is trying a different approach. The U.S. is working on limited trade deals with over 70 countries. But experts say these deals are not as strong as formal trade agreements. They may help a little, but they won’t replace what is being lost in the trade fight with China.
Global Concerns Grow
The tit-for-tat tariff battle has many world leaders worried. Countries that rely on exports, especially smaller and developing nations, could suffer big losses. When two economic giants clash, the ripple effects are global.
Leaders from Germany, the United Nations, and other major organizations are speaking out. They are calling for diplomatic solutions and better cooperation. Some say unilateral actions—like one country raising tariffs without talking—are dangerous. They could lead to a global recession if things don’t calm down soon.
What Comes Next?
For now, China says it will pause any further tariff hikes. But that could change quickly if tensions rise again. Trump has not backed down. His team says the high tariffs are meant to protect American workers and pressure China into better trade practices.
Critics say both sides are playing with fire. The longer the trade war lasts, the more likely it is to harm everyday people—through higher prices, job losses, and slower economies.
