China escalates trade war with Trump. Slaps 125% tariffs on US goods.
Summary
China hiked tariffs on U.S. goods to 125% from 84% early Friday intensifying the trade war between the world’s two largest economies. Tesla halted new orders to China.
China hiked tariffs on U.S. goods to 125% from 84% early Friday intensifying the trade war between the world’s two largest economies.
Beijing responded after the White House confirmed that President Donald Trump’s latest tariff hike on Chinese goods took the rate to 145%. However, China’s finance ministry suggested the country would not keep escalating tariffs as the current levies meant that was “no market acceptance for U.S. goods exported to China."
“If the U.S. continues to impose tariffs on Chinese goods exported to the U.S., China will ignore it," it said in a statement which seemed to set a cap on its tariffs.
Tesla
Companies are already adapting to the new trade landscape. Tesla halted new orders in China for two imported, U.S.-made models, Reuters reported. The ‘order now’ option is no longer showing for the electric-vehicle maker’s Model S and Model X on the company’s Chinese website, Barron’s verified.
China Trade Ties
China is also taking steps to strengthen trade ties with countries around the world.
Those efforts have already begun—President Xi Jinping met with Spain’s Prime Minister Pedro Sanchez in Beijing on Friday. Xi is also set to visit Vietnam, Cambodia and Malaysia next week, state-run news agency Xinhua reported, while European Union leaders are planning to visit Beijing for a summit with Xi in July, the South China Morning Post reported.
Uncertainty
Separately, Trump’s 90-day pause of reciprocal tariffs “remains fragile," France’s President Emmanuel Macron warned Friday.
Macron said that while the suspension is a signal that the door is open to negotiation it also means “90 days of uncertainty for all businesses, on both sides of the Atlantic and beyond" in a post on X. He urged the European Union to continue to work on countermeasures.
The EU paused a plan to impose retaliatory tariffs on the U.S. Thursday in the aftermath of Trump’s decision to delay levies on countries around the world.
Trump Talks
Meanwhile, the Trump administration is racing to strike ad hoc deals with more than 70 countries, The Wall Street Journal reported early Friday. Any agreements reached are likely to fall short of traditional trade deals in terms of substance, which typically take several years to negotiate, according to people with knowledge of the discussions.
