China has escalated the ongoing trade war with the United States by imposing a 125% tariff on American goods, responding to President Donald Trump’s recent 145% tariff on all Chinese imports.
In his first public statement on the tariff dispute, Chinese President Xi Jinping emphasized China’s resilience and independence. Speaking during a meeting with Spanish Prime Minister Pedro Sánchez, Xi declared:
> “China has never depended on handouts or cowered under pressure. Our progress over the past seven decades stems from hard work and self-reliance. Trade wars have no victors—opposing the world is opposing oneself.”
Sánchez, the first European leader to visit China since the US tariffs were announced, has criticized Trump’s policies. On April 8, he noted that the tariffs could push Europe to seek new markets, potentially deepening ties with China. This marks Sánchez’s third visit to China in two years.
China Urges EU to Resist US ‘Bullying’
Xi called on the European Union to join China in opposing what he described as “unilateral bullying” by the US. The Trump administration’s 145% tariff, detailed in a White House memo, builds on earlier measures targeting trade imbalances and geopolitical issues. The tariff structure includes:
– A 20% levy introduced earlier in 2025, linked to allegations of China’s role in fentanyl trafficking.
– A 125% tariff imposed just before the latest increase, aimed at reducing the US trade deficit and countering China’s responses to prior duties.
These combined levies now impose a 145% duty on all Chinese imports to the US.
EU Prepares for Wider Trade Conflict
European Commission President Ursula von der Leyen warned that the EU could target US tech giants like Meta and Google with taxes on digital advertising revenue if trade talks with Trump fail. Speaking to the Financial Times on Thursday, she stressed the EU’s commitment to a balanced agreement during a 90-day negotiation window, set to end in early July. Failure to reach a deal could expand the trade war to include services.
US Markets and Tesla Hit by Tariff Fallout
The US stock market saw renewed selling, with the Nasdaq Composite Index dropping 7%. Shares of Apple, Nvidia, and other firms declined, while oil prices fell 4%, pushing crude below $63 per barrel.
In a related development, Tesla halted sales of its California-made Model S and Model X in China after the 125% tariff increased costs. The ordering option for these models was removed from Tesla’s Chinese website without explanation.
China’s Domestic Push
China is bolstering its economy amid the trade tensions. Holding approximately $760 billion in US government bonds, China maintains significant leverage. Domestically, it has allocated $1.9 trillion in loans to upgrade its industrial sector. In technology, Huawei opened a Shanghai research center for 35,000 engineers—ten times larger than Google’s California headquarters—reinforcing China’s innovation drive.
Tariff Timeline
Trump’s tariffs on Chinese goods have risen steadily:
– February 1: 10%
– March 3: 20%
– April 2: 54%
– April 9: 104%
– April 10: 145%
As both nations dig in, the global trade landscape faces increasing uncertainty.
