Trump defends policy after china’s 125% tariffs on US goods

President Donald Trump defended his increasing tariff strategy on Friday, April 11, amidst escalating tensions with China, claiming that the United States was “doing really well” despite Beijing’s announcement of a significant hike in tariffs on American products to 125 percent. 

This development signifies a further intensification of the trade conflict between the two largest economies, causing global financial markets to experience renewed instability. 

Investors reacted quickly, selling off U.S. government bonds, which led to a decline in the dollar and volatility in stock prices. This turmoil followed Trump’s recent declaration of extensive import taxes on various trading partners, although the administration later scaled back those tariffs to 10 percent for a 90-day period, while simultaneously increasing levies on Chinese goods, prompting immediate retaliation from China. 

Trump expressed his confidence in the tariff policy on his Truth Social platform, describing it as “very exciting for America, and the World!!!” The White House maintained that Trump was hopeful about negotiating a trade agreement with China, noting that 15 other countries had proposals “on the table” during the tariff suspension.

 Press Secretary Karoline Leavitt reiterated that Trump would respond forcefully to any perceived aggression against the U.S. In the backdrop of these developments, Chinese President Xi Jinping addressed the situation, asserting that China was “not afraid” and calling on the European Union to collectively oppose unilateral ‘bullying.’

 Following Xi’s comments, China’s Commerce Ministry announced that the new 125 percent tariffs on U.S. goods would be implemented on Saturday, April 12, while the U.S. had previously raised tariffs on Chinese imports to 145 percent.

A representative from China’s Commerce Ministry attributed the ongoing stalemate solely to the United States, characterizing Trump’s strategy as a mere “numbers game” that would ultimately be seen as laughable.

 In contrast, China’s finance ministry acknowledged that further increases in tariffs were off the table, suggesting that the existing rates had already made most imports unfeasible. 

Despite the tough language exchanged, Trump expressed optimism about reaching an agreement with Xi, referring to their long-standing friendship and believing that a mutually beneficial resolution would be achieved. 

U.S. officials, anticipate that Xi will need to initiate the next steps toward reconciliation. As the economic deadlock persists, the Trump administration faces increasing pressure, evidenced by rising bond yields on April 11, which reflect investor anxiety and a declining appetite for traditionally safe assets. 

The White House noted that there was no indication of China liquidating its substantial U.S. Treasury holdings, a move that could elevate borrowing costs for the U.S. government. 

The Federal Reserve has also cautioned that Trump’s tariff policies might trigger higher inflation and hinder economic growth, with economists warning that a prolonged trade disruption could lead to increased consumer prices and a heightened risk of a global recession. 

Analyst Ipek Ozkardeskaya from Swissquote Bank remarked that the current tariff levels have become unreasonable, yet noted China’s readiness to go to great lengths in negotiations. Meanwhile, European Union leaders are gearing up for forthcoming discussions with China, including a July summit to celebrate 50 years of EU-China relations .