China Raises Tariffs on US Goods to 125%

China announced today that it was raising its tariffs on US goods to 125%, just below where Trump raised tariffs on Chinese goods earlier in the week.

Chinese leader Xi Jinping has said his nation is “not afraid,” in his first public comments on the escalating trade war with the United States, as Beijing raised tariffs on US goods to 125%.

The tariff hike is the latest in a tit-for-tat battle between the world’s two largest economies, after Trump raised tariffs on China to 145%. However, China has indicated it does not intend to go higher than 125%, saying it would be meaningless to engage in further escalation.

“The successive imposition of excessively high tariffs on China by the US has become nothing more than a numbers game, with no real economic significance,” a spokesperson for China’s Commerce Ministry said in a statement Friday.

“It merely further exposes the US practice of weaponizing tariffs as a tool of bullying and coercion, turning itself into a joke,” the spokesperson added.

This move apparently came after the Trump administration warned China not to continue to escalate and said that Xi Jinping would need to request a call with Trump. That request has not arrived.

In private discussions hours before China announced new retaliatory tariffs, the Trump administration warned Chinese officials against such a move, according to a source familiar with the discussions.

The Chinese were also told – once again – that Chinese President Xi Jinping should request a call with US President Donald Trump.

Instead, US officials woke up to news of increased Chinese tariffs and no request for a leader level call…

Two senior White House officials tell CNN that the US will not reach out to China first. Trump has told his team that China must be the first to make the move, as the White House believes it is Beijing that has chosen to retaliate and further escalate the trade war.

The report goes on to say that this situation has been going on for weeks behind the scenes. China wants to set up communications with the Chinese foreign minister and the Trump administration has said no.

China has been trying to set up a back channel, like it had with President Joe Biden’s national security adviser, Jake Sullivan, but so far that effort has been unsuccessful. The US objection, according to officials: The Trump administration has balked at China’s Foreign Minister Wang Yi serving as the interlocutor, suggesting that Wang is not close enough to Xi’s inner circle and cannot be trusted.

Chinese officials have been presented with the specific names of people that the Trump White House would like to engage with instead, but China won’t budge, sources say.

So Trump is demanding Xi acknowledge him as the top dog in this situation and Xi is just refusing to go along. Trump said earlier this week that he thought Xi wanted to make the call but couldn’t find a way to ” go about it.” Meanwhile, Xi Jinping is traveling the world talking to leaders hit by Trump’s tariffs.

China’s leader Xi Jinping told the visiting Spanish Prime Minister Pedro Sanchez on Friday that his country and the European Union should “jointly resist the unilateral bullying practices” of the Trump administration…

Next week Xi will visit Malaysia, Vietnam and Cambodia. These are all countries which have been hit hard by Trump’s tariffs.

His ministers have been meeting counterparts from South Africa, Saudi Arabia and India, talking up greater trade co-operation.

Xi is essentially trying to turn lemons into lemonade because he knows he can’t make that call and show himself as the weaker of the two.

“Seeking to negotiate on U.S. terms would be deeply embarrassing for Xi and could potentially weaken his standing and even control over the Communist Party and the country,” Steve Tsang, the director of the SOAS China Institute at the University of London, told me. That’s because the party justifies Xi’s dictatorship by portraying him as the ultimate defender of the Chinese people—the man who will restore China’s past glory and attain the “Chinese dream” of national rejuvenation. He must be seen standing up to foreign oppressors who seek to humiliate China and thwart its rightful rise…

Eventually, Trump and Xi may find their way to the negotiating table. But that will happen only if Xi can appear at least the equal of Trump, if not the man in control. Trump’s approach so far doesn’t invite this outcome…

The leaders of both the United States and China need, for domestic political reasons, to appear to be the top dog. The problem is that only one of them can be.

We’ll see if things change but as for now, I don’t think Xi is going to give in. It would kill his entire image domestically. Dictators like Xi don’t have to worry about a lot of things that politicians in democracies do, but being seen as weak is definitely one he can’t afford. So this trade war with China could keep going for a while until we start to see the real world impacts these tariffs are bound to cause if left in place.