Washington, D.C. | April 11, 2025
Tensions between the United States and China reached a new high as Beijing imposed a 125% tariff on American goods, retaliating against an escalating series of U.S. trade measures introduced by President Donald Trump. The move comes just one day after the U.S. announced a blanket 145% tariff on all Chinese imports.
The tit-for-tat trade war has shaken global markets, strained transatlantic ties, and drawn in key global players like the European Union.
Xi Jinping: “China Fears No One”
Speaking publicly for the first time on the recent tariff escalation, Chinese President Xi Jinping condemned the U.S. measures as “unilateral bullying.” During a meeting in Beijing with Spanish Prime Minister Pedro Sánchez, Xi emphasized China’s resilience and self-reliance.
“China has never relied on the generosity of others nor feared coercion,” Xi said. “There are no winners in a trade war; going against the world is akin to going against oneself.”
Sánchez, the first European leader to visit China since the U.S. tariff announcement, echoed criticism of Washington’s economic policies and suggested that the EU may increasingly align with China in trade matters. He warned earlier this week that Trump’s approach could push Europe to explore new markets and deeper cooperation with Asia.
Trump’s Tariff Timeline
The U.S. tariff escalation on Chinese imports has intensified in rapid succession throughout 2025:
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Feb 1: Initial 10% tariff on Chinese goods
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Mar 3: Raised to 20%
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Apr 2: Increased to 54%
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Apr 9: Rose again to 104%
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Apr 10: Final bump to 145% across the board
The White House said the tariffs were in response to trade imbalances, national security concerns, and China’s alleged involvement in fentanyl trafficking.
EU Warns of Retaliatory Measures
As trade talks stall, European Commission President Ursula von der Leyen warned that the EU is prepared to tax major U.S. tech firms if no progress is made during the current 90-day negotiation pause, set to expire in July.
Von der Leyen told the Financial Times that if talks fail, the EU could target digital advertising revenues from companies like Meta and Google, further expanding the trade dispute from goods into the services sector.
Markets Rattle Amid Tariff Turmoil
The economic fallout has been swift:
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The Nasdaq Composite Index fell nearly 7%
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Shares of Apple, Nvidia, and other major tech firms dropped sharply
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Oil prices slid by over 4%, with crude falling below $63 per barrel
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Bond markets saw increased selling pressure
Additionally, Tesla halted sales of its Model S and Model X vehicles in China, after Beijing’s 125% tariff made U.S.-made electric cars even less competitive. The company quietly removed both models from its Chinese website, though no formal statement was issued.
China Responds with Massive Investment Push
While retaliating on the trade front, China is also taking aggressive steps to boost its domestic industry:
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$1.9 trillion in new loans extended to the manufacturing sector
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Rapid construction of new factories and tech infrastructure
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Huawei opened a massive new research center in Shanghai, employing 35,000 engineers—a facility ten times the size of Google’s California HQ
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China still holds over $760 billion in U.S. government bonds, maintaining considerable economic leverage
