By Didi Tang and Zeke Miller
WASHINGTON (AP) — The tariff battle between the world’s two biggest economies was caught in a strong danger on Wednesday as President Donald Trump attempted to reduce his global trade war into a direct and dangerous showdown with Beijing.
He once again hiked tariffs in China again as Trump overturned his larger “mutual” tariffs in most of the world in the face of the recession fears – 125%. The move locks strategic rivals into deep standoffs that put both the economy and interests around the world at stake. The US and China are already engulfed in competition from artificial intelligence to monetary policy to overall global impact, which means they have a higher stake than ever.
Each country dares each other to flash first. However, the round of escalation raises concerns that while the diplomatic window has become even narrower, the economic pain in both economies is intensifying.
Behind all of that, as always, geopolitics lurks. Regional and global safety concerns are constantly playing around with economic relations between the two most powerful countries in the world when it becomes aggressive.
“President Trump is going to punch back more harder when punching the United States,” said White House spokesman Caroline Leavitt.
Before and after approach
After Beijing responded with President Donald Trump’s 34% “mutual” tax on China at the same 34% 34% tax rate on American goods, Trump raised the tariffs by another 50% points on Wednesday morning, with Beijing only being filled with the same tariff hike. US products going to China are currently 84% taxed.
Hours later, Trump declared that China’s imports to the United States would be “quickly” taxed at 125%, citing “the lack of respect that China has shown to the global market.”
“I hope at some point, we will recognize that in the near future, the era of China tearing the US and other countries apart is no longer sustainable or acceptable,” Trump wrote on his true social platform.
Treasury Secretary Scott Bescent argued that this was Trump’s strategy, and that Beijing “showed himself to the world as a bad actor.”
Financial markets have recovered from the deepest lows in news that China is bear the brunt of Trump’s rage, but the real-world outlook for a fierce trade war with China was still set to be important.
On Wednesday, the US-China Business Council urged the two leaders to “come to the table” and talk. “Target tariffs to encourage China to come to the negotiation table are one thing, but these drastic tariffs are not in anyone’s interest. They will do great harm to the global, the US, the Chinese economy, American businesses, farmers and consumers,” the council said.
Trump leaves little room for negotiations on off-ramps with China, which has not reached China’s potential.
Sang Yun, director of the China Program at Washington-based think tank Stimson Centre, said: She noted that Chinese leaders called the US without an invitation after the 9/11 terrorist attacks. Trade tensions could spill into other domains if not checked, she warned.
Craig Singleton, a senior fellow in China, another Washington-based think tank, is the foundation of the Democracy Foundation, and agreed that a call from Beijing “is unlikely in this climate.”
“Each side believes time is on that side and it increases the risk that it won’t move to escalate until real damage occurs,” he said. “This is no longer just customs duties. It’s a test of will.”
There is calculation on both sides
Before Trump’s announcement, Bescent called “unfortunate that the Chinese people don’t actually want to come and negotiate.”
“And you can tell you that this escalation is a loser to them,” Bescent said Wednesday on Fox Business Network’s “Morning and Maria.” “Their exports to the US are five times more than they are to China. So they can raise tariffs. But what is that?”
China has its own calculations. Leadership, which oversees the world’s second largest economy, has vowed not to surrender to our bullying.
Tariffs expected higher than Trump have surprised other countries, but China says it has learned lessons from previous tariff transactions during Trump’s first term. In response to Trump’s several tariff increases, Beijing responded quickly with a tariff and non-tariff measures package every time.
“We have been in a trade war with the United States for eight years and have accumulated a wealth of fighting experience,” said an editorial by the ruling party’s flagship newspaper People’s Daily on Monday. The newspaper assured the Chinese masses that “the sky will not fall.”
“Faced with the effects of US tariff bullying, we are highly resilient,” the party newspaper said, citing the country’s reliance on exports to the US market and a decline in new measures to boost domestic consumption.
Since Trump imposed the first round of tariffs on China in 2018, Beijing leaders have developed a toolkit of tariffs, import curbs, export controls, sanctions, regulatory reviews and measures to limit business in China. Everything is designed to inflict pain on the US economy and businesses in response to trade movements by the US government.
Melanie Hart, senior director of the Atlantic Council’s Global China Hub, said Beijing is now “throwing the US all over the toolkit,” striking American farmers and separating the country from key minerals.
“They have the bunkers they’ve built at this moment,” Hart said. “They’re in the bunkers, and if I’m ginping, I feel much more comfortable than Donald Trump today.”
However, people’s daily life has also made it clear that Beijing remains open to discussions. “We faced volatility and extreme pressure from the US,” he said, “We haven’t closed the door to negotiation.”
The country’s official Xinhua news agency argued in an editorial that China does not want a trade war, but can fight the war.
“There are no winners in the trade war,” he said. “But China is not afraid of a trade war.”
Original issue: April 9, 2025, 4:54pm EDT
