The tariff had been raised by 145 percent across the board on Chinese imports-one of the most aggressive trade policy moves in the Trump presidency and a major escalation of the trade war. The sudden hike has been on the radar for several days, and the final number was clarified in an executive order released Thursday morning, which confirmed additional tariffs meant to punish China for trade practices, fentanyl smuggling, and the issues of migration.
Before now, a 125 percent rate had been assumed based on Trump’s comments and reports in the media. However, that did not account for two earlier levies-totaling 40 percent-that were imposed this year on China-related concerns and are, according to this administration, still in force. CNBC had initially reported the discrepancy, which was subsequently confirmed in a communication to Yahoo Finance by the White House.
A focused approach
This decision says, without ambiguity, that this time around, trade war time is China time. While last weekend Trump slapped unilateral 10 percent tariffs on almost all other trading partners, such tariffs pale in comparison to the major blow directed at the world’s second-biggest economy.
“China: That’s the big one,” Trump said, laying out his position during a White House address Wednesday. Treasury Secretary Scott Bessent affirmed this volcano of words, describing China as “the biggest source of the U.S. trade problems,” and raised the 125%-this just counting for the initial penalties.
The assessment intends to refocus the economic isolation of Beijing. Analysts believe the present administration is purposely tightening trade relations with regional competitors of China, some of whom may be getting closer to China on broader geopolitical grounds, including India, Japan, Vietnam, and South Korea.
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Market reactions and concerns about the economy
Markets responded immediately, and soon thereafter, markets plummeted. The Dow Jones Industrial Average declined by 2.5 percent, while the S&P 500 fell by 3.46 percent as concerns over retaliatory tariffs from China and the prospect of further disruptions to global supply chains started setting in.
Experts warn that these kinds of high tariffs would mean that U.S. consumers could expect price hikes, specifically for goods that already heavily depend on Chinese imports, such as electronics, textiles, and industrial equipment. Economists also say it would likely raise complications in controlling inflation and pose a real threat to the signs of recent stability.
Making campaign promises into reality in policy
Trump had long been threatening to impose massive tariffs on goods imported from China. During his presidential campaign, he announced a specific 60% tariff on imports tagged as China products. The 2025 measure more than doubles that amount, making it an expressed policy fulfillment and perhaps the most aggressive act of trade enforcement in modern U.S. history.
If arms are held up ahead of the presidential elections, this will serve the intentional purpose of energizing the political base, most of whom would regard a tough stance on China as economic patriotism. However, experts argue that such measures would come at high prices in terms of global trade relationships and domestic financial markets.
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What’s next
China is not expected to reveal the retort yet, but trade analysts expect retaliation. The rest of the world, meanwhile, would be waiting on whether this significant escalation would eventually flare into a larger trade conflict or return Beijing to the negotiating table.
Watch this video and learn more about how Chia reacts to Donald Trump’s trade war.
