US-China Tariff War Escalates: Global Economic Fallout Looms

April 10, 2025 | 05:04 pm

TEMPO.CO, Jakarta - U.S. President Donald Trump has announced plans to raise tariffs on imported goods from China to 125 percent soon. He made the statement on Wednesday, April 9, 2025, as the trade dispute between Washington and Beijing intensifies.

In his post on the Truth Social platform, Trump said he is increasing tariffs imposed by the U.S. on China to 125 percent based on the lack of respect shown by China towards the global market.

Previously, tensions escalated following the announcement of retaliatory tariffs that China would impose on all goods from Uncle Sam's land. The retaliatory tariff of 34 percent was imposed after Trump implemented reciprocal tariffs on several countries, including China, at 34 percent.

This was in addition to the existing 20 percent tariff, making the total tariff imposed by the U.S. on China 54 percent. In response to Trump's actions, China did not remain silent and retaliated by imposing tariffs on American products, effective April 10, 2025, as reported by Al Jazeera.

Furthermore, China's Ministry of Finance had previously imposed a 15 percent tariff on importing coal and liquefied natural gas (LNG) from the U.S. The Chinese government stated through its Ministry of Commerce that this policy was implemented as a retaliatory measure to protect its interests and activities.

As reported by Al Jazeera, the Chinese government's export policy aims to protect national security and interests and fulfill international obligations such as non-proliferation.

Trump Responds with 104% Tariffs

Through his private social media platform, Truth Social, Trump responded to China's retaliatory tariffs, stating that any country that imposes retaliatory tariffs will be met with new tariffs, even higher than those already imposed.

Trump's statement shows his dissatisfaction with China's retaliatory actions. He threatened to impose an additional 50 percent tariff if Beijing does not withdraw its tariff policy. If this threat materializes, the total tariff imposed on Chinese goods could reach 104 percent.

As reported by CBS News and USA Today, Trump will impose an additional 50 percent tariff on China if they do not withdraw the 34 percent increase above long-term trade violations committed by tomorrow, April 8, 2025.

Impact on the Global Economy

The announcement of new tariffs has caused turmoil in the global stock market. U.S. stock futures experienced a significant drop on Friday, indicating further losses on Wall Street. This was due to the massive tariff policy of the Trump administration, which has caused losses of up to 2.4 trillion US dollars in U.S. equities.

Shares of major technology companies such as Apple and Nvidia also plummeted in pre-market trading. Both companies rely heavily on China and Taiwan to produce their goods, so tariff policy impacts their business.

In Japan, one of the U.S.'s main trading partners, Prime Minister Shigeru Ishiba, referred to the situation as a "national crisis." The sharp decline in Japanese banking stocks on Friday made the Tokyo stock market record its worst week in several years. Meanwhile, the European stock market also experienced its largest weekly loss in three years.

However, U.S. Secretary of State Marco Rubio dismissed concerns about an economic crisis. He stated that the market adapts to policy changes and will soon adjust.

The escalation of the import tariff war between the U.S. and China has created uncertainty in the global market and may have long-term impacts on the world economy. With both countries showing firmness in their positions, the likelihood of reaching a peaceful agreement seems increasingly slim. If this situation continues without a resolution, the impact could be felt through a global economic slowdown and increasing commodity prices for consumers worldwide.

Savero Aristia Wienanto and Ilona Estherina contributed to the writing of this article.

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