The tariff fight between the world's two largest economies spiraled into greater peril Wednesday as President Donald Trump tried to narrow his global trade war into a direct — and risky — faceoff with Beijing.
As Trump reversed his larger “reciprocal” tariffs on most of the world in the face of recession fears, he nonetheless hiked his tariffs on China once again. The move locks the strategic rivals into a deepening standoff that endangers both their economies and interests around the world. The stakes are higher than ever, as the U.S. and China are already embroiled in competition on everything from artificial intelligence to monetary policy to overall global influence.
Each nation dares the other to blink first. But the rounds of escalation are raising concerns that the window for diplomacy has narrowed even further, while the economic pain on both economies intensifies.
Behind it all, as usual, geopolitics lurks — the concerns about regional and global security that are always in play when economic relations between two of the world's most powerful nations turn aggressive.
“When you punch the United States of America,” said Karoline Leavitt, the White House press secretary, “President Trump is going to punch back harder.”
After Beijing responded to U.S. President Donald Trump's 34% “reciprocal” tax on China with the same 34% rate on American goods, Trump raised the tariff by another 50 percentage points, only to be met by the same tariff hike by Beijing on Wednesday morning. U.S. products going to China are now to be taxed 84%.
Hours later, Trump declared that Chinese imports to the United States would be “immediately” taxed at 125%, citing “lack of respect that China has shown to the World's Markets.” However, the universal tariffs on China actually total 145%. When Trump announced them on Wednesday, he did not account for a 20% tariff on China tied to its role in fentanyl production that was already in effect, the White House said.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote on his Truth Social platform.
Treasury Secretary Scott Bessent insisted this had been Trump's strategy all along and that Beijing has “shown themselves to the world as the bad actors.”
While the financial markets rebounded from their deepest lows at the news that China would be facing the brunt of Trump's wrath, the real-world prospects of the intensifying trade war with China were still set to be significant.
On Wednesday, the U.S.-China Business Council urged the two leaders to “come to the table” and talk. “Targeted tariffs to encourage China to come to the negotiating table are one thing, but these sweeping tit-for-tat tariffs are in no one’s interests. They will significantly harm the global, U.S., and Chinese economies as well as American businesses, farmers, and consumers,” the council said.
Trump has left little room to negotiate an off-ramp with China, short of that country capitulating — which would be anathema to Chinese President Xi Jinping.
“Xi will not be forced into a call,” said Sun Yun, director of the China program at the Washington-based think tank Stimson Center. Only once in recent history, she noted, has a Chinese leader phoned the United States without invitation — after the 9/11 terrorist attacks. The trade tensions, if unchecked, could spill into other domains, she warned.
Craig Singleton, the senior China fellow at another Washington-based think tank, the Foundation for Defense of Democracies, agreed that a phone call from Beijing is “unlikely in this climate.”
“Each side believes time is on its side, which raises the risk that neither moves to de-escalate until real damage is done,” he said. “This is no longer about tariffs alone. It’s a test of wills.”
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5:00PM - 6:00PMKnown as "The Happy Conservative Warrior," Mike Gallagher is one of the most consistently popular hosts in America.