April 29, 2025
Tensions between the United States and China escalated dramatically this week, as both governments announced new rounds of tariffs that are set to further strain the global economy.
The U.S. has increased tariffs on a broad range of Chinese imports — including electric vehicles, semiconductors, and solar equipment — to as high as 145%. U.S. officials cited national security concerns and the need to protect critical industries as key reasons behind the move. China swiftly responded with its own countermeasures, imposing retaliatory tariffs of up to 125% on U.S. agricultural goods, machinery, and aircraft.
While former President Donald Trump indicated that tariff reductions could be “possible” depending on China’s willingness to make concessions, Chinese officials strongly denied that any trade talks were ongoing. Beijing emphasized that it would not negotiate under pressure, rejecting the notion that external threats would influence its policy decisions.
Meanwhile, U.S. Treasury Secretary Scott Bessent admitted that the current tariff structure is “not sustainable” in the long term. Bessent stressed that any meaningful resolution would require reciprocal actions from both sides.
The impact of these tariff hikes is already being felt in business sectors. Ryan Petersen, CEO of logistics firm Flexport, warned that up to 80% of small American businesses that depend on imports from China could face bankruptcy if the tariffs persist.
China’s leadership also appears to be stepping up efforts to signal internal stability. President Xi Jinping is expected to visit Shanghai this week to showcase the resilience of China’s technology and financial industries amid external economic pressure.
Global financial markets have reacted with increased volatility. Investors remain cautious, as continued uncertainty around the U.S.–China relationship weighs on forecasts for supply chains, investment flows, and broader economic recovery efforts.
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