China strikes back with 125 per cent tariffs on US goods as trade war intensifies

China on Friday retaliated against US President Donald Trump’s reciprocal tariffs by raising its levies on U.S. goods to 125 per cent from 84 per cent, according to a statement from the Customs Tariff Commission of the State Council.

“Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the statement said, according to a CNBC translation.

“With tariff rates at the current level, there is no longer a market for US goods imported into China,” the statement said, adding that “if the US government continues to increase tariffs on Chinese goods exported to the US, China will ignore.”

The Trump administration confirmed to CNBC on Thursday that the US tariff rate on Chinese imports now effectively totals 145 per cent.

Hopes for a US-China deal to resolve trade tensions have faded fast as Beijing has been hitting back in the last week with tit-for-tat duties on American goods and wide-ranging restrictions on US businesses.

“It’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” US Treasury Secretary Scott Bessent told Fox Business on Wednesday after China’s raised tariffs to 84 per cent.

“They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them,” Mr Bessent said.

Goldman Sachs on Thursday cut its China GDP forecast to 4 per cent given the drag from U.S. trade tensions and slower global growth.

While Chinese exports to the U.S. only account for about 3 percentage points of China’s total GDP, there’s still a significant impact on employment, Goldman Sachs analysts said. They estimate around 10 million to 20 million workers in China are involved with US-bound export businesses.