US-China trade war escalates as tariffs hit 245%, stoking global uncertainty and shaking up critical supply chains.
The United States has intensified its tariff war with China, with the White House announcing potential duties of up to 245% on Chinese goods. This marks a sharp escalation in the ongoing trade conflict and underscores Washington’s growing concerns over economic dependency on China—particularly in sectors critical to national security like rare earths, lithium, and cobalt.
The announcement, made on Tuesday, comes as part of former President Donald Trump’s renewed push to impose “reciprocal tariffs” on countries that, according to him, unfairly tax American imports. Trump has repeatedly claimed that China, India, Brazil, and others impose higher duties on US goods than the US does in return. In this latest move, the White House attributed the drastic increase in tariffs to China’s retaliatory measures, which included 125% tariffs on American goods.
Read more: US Tariff Wars, What Are The New Tariff Rates?
The Breakdown of Tariff Escalation
Until now, the tariff exchange between the world’s two largest economies stood at 145% on Chinese imports to the US, and 125% on American exports to China. With the fresh announcement, the 245% figure now represents the maximum tariff the US is willing to impose on specific goods from China.
While the exact categories of goods that will attract these new tariffs remain unclear, sources indicate they could include strategic goods linked to China’s growing dominance in battery technology, electronics, and green energy.
In a parallel development, Trump also launched an investigation into the national security risks stemming from America’s dependence on imported critical minerals. These include cobalt, lithium, nickel, and other rare-earth metals used in the production of EV batteries, defense tech, and advanced electronics. The investigation hints at a broader reshoring push aimed at reducing foreign supply chain vulnerabilities—especially from China.
Read more: Trump’s Tariff Tsunami: Global Markets Reeling, Recession Fears Mount
China Responds, Yet Keeps Its Calm
China responded with a dual narrative. On one hand, a senior official admitted that US tariffs were creating “pressure” on the Chinese economy. On the other hand, Beijing simultaneously released upbeat economic data showing 5.4% GDP growth in Q1, industrial output up 6.5%, and retail sales up 4.6%, painting a picture of resilience despite mounting trade tensions.
Still, China warned of growing global uncertainties and urged stronger domestic consumption and economic support measures. A Chinese foreign ministry spokesperson accused the US of “blackmail” and called for dialogue based on “mutual respect and equality.”
“The ball is in China’s court,” Trump said, further adding that the US “does not have to make a deal with them,” echoing a hardline stance that’s likely to rattle global trade markets.
Economic & Political Ripple Effects
The trade war is not only affecting the bilateral relationship between the US and China, but also casting long shadows over the global economy. The World Trade Organization (WTO) has warned that persistent tariff tensions could slash global merchandise trade by 0.2% in 2025—and possibly by as much as 1.5% in a worst-case scenario.
Markets worldwide have already shown signs of stress. Following the cumulative tariffs breaching 100% earlier this month, stock indices in the US, Asia, and Europe witnessed sharp declines. While Trump has since paused some orders—especially those affecting countries other than China—the damage to investor sentiment is done.
Meanwhile, Beijing has taken proactive steps to mitigate the impact by exploring alternative trade alliances. In March, China’s Foreign Minister Wang Yi reached out to India, calling for the “elephant and the dragon” to unite against US hegemonism. Beijing has also urged the European Union to collaborate in resisting “unilateral bullying,” marking a clear attempt to build a multipolar resistance to Washington’s aggressive trade stance.
Looking Ahead
As the tariff war continues to evolve, questions remain about how long the world’s two largest economies can keep escalating without causing significant global economic damage. Trump’s strategy of using tariffs as a negotiation tool might offer him short-term leverage, but it’s unclear whether this pressure will bring China to the negotiating table or push it further away.
For now, the global economy braces for more volatility. With geopolitical rifts deepening, supply chains at risk, and global growth hanging in the balance, the road ahead may be rocky for both Washington and Beijing.
