China’s finance ministry has increased tariffs on select US imports to 125%, aligning with the latest US actions and intensifying the ongoing trade conflict. Announced on Friday, the new tariffs follow a recent hike to 84% just days after the US imposed higher taxes on Chinese goods. The changes, effective immediately, were backed by strong statements from Chinese officials who called the US measures unilateral and aggressive. China’s foreign ministry labeled the US actions as “hegemonic,” while the commerce ministry criticized them as a “mistake on top of a mistake.”
According to BBC News, Beijing stated it would not escalate further but warned against continued US tariff pressure, arguing that the latest increase violates international economic norms. China’s Commerce Ministry told the BBC that US tariffs have become a “numbers game with no practical significance,” suggesting they will soon be regarded as a joke.
The market’s response to the tariff increase reflected uncertainty. Traditional safe-haven assets saw modest inflows, while risk assets reacted unevenly. Bitcoin, for instance, remained nearly flat at $81,292.68 after an initial dip. Gold, conversely, rose by 0.35%, consistent with its behavior during previous trade tensions, as investors shifted from equities to assets less affected by trade disruptions. US Treasury bonds also saw increased demand, with the 10-year bond prices rising 0.12%, signaling investor caution.
Oil prices fell sharply by 1.02% as traders adjusted demand expectations amid prolonged trade disputes that could hinder global industrial activity. Meanwhile, Chinese bonds remained relatively unchanged, suggesting market stability or anticipated intervention by the People’s Bank of China.
The ongoing trade tensions trace back to the Trump administration’s tariff policies, with the recent increases pushing duties to historically high levels. The 125% tariff now serves as a baseline for many products. Taiwan’s President Lai Ching-te mentioned ongoing negotiations with Washington after US tariffs on Taiwanese exports decreased temporarily.
The broader implications of these elevated tariffs remain unclear. Investors are divided on whether this marks a turning point in trade relations or signals a permanent economic divide between the US and China. While traditional assets like gold and bonds absorb geopolitical risk, Bitcoin’s uncertain role reflects broader hesitancy in defining its place during macroeconomic crises.
