The ongoing trade war between the United States and China has reached a new and dangerous high, with both countries locking horns in a tit-for-tat escalation that threatens not only their bilateral relationship but also global economic stability.
Following the Trump administration’s sweeping new tariffs—peaking at an extraordinary 104% on Chinese imports—China has struck back with aggressive countermeasures. Effective Thursday, Beijing will impose tariffs of up to 84% on US goods, marking a dramatic jump from the earlier 34%. In tandem, China has filed another formal complaint with the World Trade Organisation (WTO), accusing Washington of undermining the multilateral trading system and violating international trade norms.
China’s Ministry of Finance didn’t mince words, calling the US move “a mistake on top of a mistake” and a violation of China’s legitimate rights. Beijing is positioning itself as a defender of global trade order, even as it takes forceful retaliatory steps at home. The latest measures include:
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Export restrictions on 12 US firms, such as American Photonics and Novotech, now banned from receiving dual-use technologies.
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Blacklisting six US companies, including Shield AI and Sierra Nevada Corporation, barring them from trade and investment activities in China.
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A reaffirmed 34% tariff on all US imports, alongside restrictions on exports of rare earth minerals—critical for electronics and defense industries.
This escalation follows Trump’s imposition of what he calls “reciprocal tariffs” on a wide range of countries, with China singled out for the most severe penalties. The US administration justifies its approach by citing a significant trade imbalance—USD 440 billion in Chinese exports to the US versus USD 145 billion in American exports to China in 2024.
However, Beijing counters that this trade imbalance is "inevitable" given global supply chains and economic structures. In a white paper, China emphasized that the trade relationship is “roughly in balance” when viewed in broader terms and that punitive tariffs would ultimately hurt both economies—especially consumers and manufacturers.
Unlike other nations that have entered talks with Washington, China has explicitly stated it will not negotiate under pressure and will instead “fight to the end.” This hardline stance, coupled with retaliatory policies, reflects a deepening strategic rift rather than a temporary policy dispute.
With both sides digging in, and the WTO now pulled directly into the conflict, the prospect of a resolution appears increasingly distant. The trade war, once a bilateral tension, now risks snowballing into a global economic disturbance.
