U.S.-China Trade War Escalates: Tariffs Surge, Global Economy Feels the Shock

Kazi Abul Monsur#

A new chapter in the tariff war between the world’s two largest economies has begun, triggered by an announcement from former President Donald Trump. The U.S. has now imposed a 145% tariff on Chinese products. In retaliation, China has raised tariffs on American goods to 125%.

According to analysts, the U.S. still has a significant trade deficit with China. Data from 2024 shows the U.S. imported goods worth approximately $550 billion from China, while its exports to China totaled only about $140 billion. This trade imbalance has long been a strategic concern for both the Trump and Biden administrations.

In response to growing tensions, China is seeking to strengthen its trade ties with the European Union (EU). Chinese President Xi Jinping has already visited Spain and France, urging Europe to “reduce reliance on the U.S. to maintain global economic balance.”

The U.S. has accused China of distorting global markets by offering unfair subsidies on key exports—particularly electric vehicles, solar panels, and microchips. China has denied these allegations, calling the U.S. tariff policies “a violation of international trade principles” and “politically motivated.”

Meanwhile, the New York Stock Exchange (NYSE) has seen a significant drop in tech sector shares. The Shanghai Composite Index has also fallen by 3.2% in the past 24 hours. Globally, energy and raw material prices have surged amid fears of supply chain disruptions.

Trump remains defiant and praised the new tariff policy on social media. The U.S. administration has stated that China must take the first step toward negotiations. However, the White House has hinted that future compromise is possible.

China’s Finance Minister commented that the new tariffs have made importing U.S. products nearly impossible, effectively halting the flow of American goods into China. At the same time, the U.S. market is beginning to feel the adverse effects, with continuous declines in the stock market.

As of now, neither side has shown any willingness to compromise. Trump wrote on social media: “We are doing great with our tariff policy. It’s an exciting time for America and the world.” The U.S. government has made it clear that China must initiate talks.

In a contradictory message, the White House added that President Trump is open to negotiations: “Xi Jinping is a longtime friend of mine,” Trump said. “I believe we can reach an agreement that benefits both nations.”

During a summit with the European Union, President Xi Jinping said, “China and Europe must work together against unilateral tariffs.” However, Australia has declined to participate in China’s proposed alliance.

Notably, the increased U.S. tariffs took effect on April 9. While other countries were granted a 90-day deferral, tariffs on China were instead raised further.

The global impact of this tariff war is already evident. Investors and international business leaders are concerned. Economists warn that if this instability continues, the global economy could face a serious setback.