The President of the United States, Donald Trump, has once again escalated the trade conflict with China by confirming that tariffs imposed on products from the Asian giant have now reached 145%, a figure that experts are already comparing to a de facto trade embargo.
The White House confirmed this Thursday to the CNBC that the tariffs on Chinese imports amount to 145%, following the addition of a new 125% tariff to another 20% imposed at the end of February, which they "had forgotten".
However, the Republican leader maintains a conciliatory tone towards his Chinese counterpart, Xi Jinping, asserting that both countries will eventually reach "something very beneficial."
"We'll see what happens with China. We would love to reach an agreement", Trump declared during a cabinet meeting open to the press.
In his speech, he reiterated his close relationship with the Chinese president, which gives him confidence that there will ultimately be an agreement.
“I have great respect for President Xi Jinping. He has essentially been a friend of mine for a long time. And I believe we will end up achieving something very beneficial for both countries,” he stated, in remarks reported by U.S. media.
A trade truce with exceptions
The increase in tariffs on China comes just a day after Trump announced a partial 90-day truce on the tariffs applied to other trade partners, with the notable exception of China, which was left out of the temporary relief.
This decision would be motivated by what the U.S. administration considers an insufficient response from Beijing regarding fentanyl trafficking, as well as recent Chinese trade reprisals.
“The only thing we are doing is putting things in order”, stated the U.S. president.
In that context, the president again criticized China's international trade policies: "They have taken advantage of our country for a long time. They have scammed us more than anyone else."
Impact on financial markets
The announcement had an immediate effect on Wall Street, where the major indices recorded declines.
The S&P 500 plunged by 4%, while the price of Texas crude fell below 60 dollars.
The yield on 10-year bonds also saw a sharp reversal, erasing the gains made following positive inflation data.
The level reached by the tariffs represents, according to analysts like Preston Caldwell, senior economist at Morningstar Research Services, an almost complete blockade of bilateral trade.
"It is very unlikely that there will be many customers willing to buy Chinese products if they have to pay a surcharge of 145% for them," Caldwell pointed out.
"The result is that companies have a strong incentive to shift their trade from China to other countries in the region," he added.
TikTok, the frustrated deal and the power of tariffs
Tariff pressure has also had collateral consequences on other fronts, such as the failed agreement for TikTok to continue operating in the United States.
“We had an agreement with TikTok, almost not an agreement, but quite close, and then China changed it because of tariffs,” Trump revealed during an informal conversation aboard the presidential plane Air Force One.
"If I had slightly reduced the tariffs, they would have approved the agreement in 15 minutes, which demonstrates the power of tariffs," he added, in an implicit acknowledgment of how his tariff strategy influences bilateral relations.
Since the beginning of his second term, Trump has attempted to force TikTok to sever its ties with its Chinese parent company, ByteDance, in compliance with a law passed in Congress that took effect on the same day of his inauguration.
In that context, he signed an executive order to extend the adaptation period by 75 days, and recently issued another similar extension.
Warning from Beijing and rising tensions
For its part, the Chinese government has reiterated that it has "a firm will" and "abundant resources" to respond "with determination" if Washington continues its strategy of economic pressure.
In statements collected by state media, Xi Jinping's administration made it clear its willingness to continue confronting Trump's measures.
The U.S. president himself, showing no signs of moderation, insisted on his hardline stance against the Asian country: “At some point, hopefully in the near future, China will realize that the time when it was scamming the United States and other countries is no longer sustainable or acceptable,” he wrote on his platform Truth Social.
Frequently Asked Questions about U.S. Tariffs on China
What is the current level of U.S. tariffs on China?
The tariffs of the U.S. on China have reached 145%, as confirmed by the White House. This increase is due to a new tariff of 125% added to another previously imposed 20%. The decision is part of a broader tariff strategy by President Donald Trump to pressure China in trade.
Why has Trump decided to increase tariffs on China?
Trump has justified the increase in tariffs as a response to what he considers prolonged trade abuses by China and the trafficking of fentanyl, which, according to the White House, comes from the Asian country. The U.S. president claims that China has taken advantage of the U.S. for a long time and aims to balance trade relations between the two countries.
How has China responded to the increase in tariffs by the U.S.?
China has responded by raising its own tariffs on U.S. imports by up to 125%. Moreover, it has added several American companies to its "unreliable entity list" and imposed additional export controls. China's strategy aims to counteract U.S. measures and protect its commercial interests.
What has been the impact of these tariffs on the financial markets?
The announcement of tariffs had a negative effect on financial markets. Wall Street experienced significant declines, with the S&P 500 falling by 4% and the price of Texas crude dropping below 60 dollars. These movements reflect the uncertainty and concern over the potential economic consequences of the tariff escalation between the U.S. and China.
Is there a possibility of a trade agreement between the U.S. and China?
Despite the intensification of the trade conflict, Trump has expressed hope for reaching a mutually beneficial agreement for both countries. The president relies on his relationship with Xi Jinping to achieve understanding, although the current tensions and tariff measures complicate the chances for a short-term agreement.
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