U.S. tariffs on imports from China actually total 145%, the White House said Thursday, amid an escalating tariff war between the world’s two largest economies that threatens to upend global trade.
On Wednesday, U.S. President Donald Trump announced he was raising tariffs on Chinese imports to 125%. But the White House said Thursday that did not include a 20% tariff the U.S. had previously imposed on China for fentanyl trade. Adding that in takes the new China tariffs total to 145%.
Trump’s tariff hike against China came as he announced a surprise 90-day pause on sweeping duties for more than 75 other countries. He said those countries had sought to negotiate with the United States and had not resorted to any retaliatory measures.
At a Cabinet meeting on Thursday, Trump indicated he was open to working out a deal with China. He also warned that he would revert to higher tariffs if the U.S. does not reach a deal with many of its trading partners during the temporary tariff suspension period.
“If we can’t make the deal that we want to make, or we have to make, or that’s good for both parties … then we go back to where we were,” said Trump.
He declined to say whether he would extend the pause period in such an eventuality. “We have to see what happens at that time,” he said.
Trump also said he expects “transition cost and transition problems” related to his tariff measures. But he defended his actions, contending that the measures were helping the U.S. rake in billions of dollars every day.
The market rollercoaster that began when Trump declared the tariff “Liberation Day” last week continued Thursday. U.S. benchmark stock indexes pared back much of the gains that had been made on Wednesday when the market had posted a historic rally.
“(China has) really taken advantage of our country for a long period of time. They’ve ripped us off… All we’re doing is putting it back in shape where we’re setting the table,” Trump told reporters on Thursday.
Trump open to deal with China
Notwithstanding the incipient trade war and tough rhetoric, Trump called Chinese President Xi Jinping a “friend” and indicated the U.S. would be open to working out a mutually beneficial deal.
“We’ll see what happens with China. We’d love to be able to work a deal,” Trump told reporters.
“I have great respect for President Xi. In a true sense, he has been a friend of mine for a long period of time and I think we’ll end up working out something that is very good for both countries. I look forward to it.”
In response to Trump’s latest tariff hike, Chinese Foreign Ministry Spokesperson Lin Jiian said China does not want to fight trade and tariff wars, but will not flinch when a trade and tariff war comes.
China had announced its own retaliatory levies of 84% on all US imports.
On Thursday, Xi called for building a community with a “shared future with neighboring countries,” a move that analysts see as a strategic attempt by China to mitigate the impact of the ongoing tariff war with the U.S. through stronger engagement with South and Southeast Asian nations.
Xi’s statement at a conference on work related to neighboring countries came ahead of his official visit to Malaysia, Vietnam, and Cambodia next week.
Impact of trade war
China-based businessman Zhang Shengqi told RFA he expects both China and the United States to suffer in the short term from the trade war, but believes China will be hit harder in the long term due to its heavy dependence on exports to the United States.
The United States, on the other hand, can use this opportunity to promote the repatriation of the supply chain and gain negotiating advantages, and gradually rebuild its sovereign economic system, he said.
“The 125% tariff imposed by the United States on China is not a real trump card, but a deterrent card, intended to reshape the global fair trade order and force China to renegotiate,” said Zhang.
A Taiwanese businessman, who requested anonymity for fear of reprisals, said his friends and partners in mainland China feel helpless about the situation but are forced to accept the reality.
Operations of many factories in China have been cut back significantly, with only those that cater to the most basic needs of consumers still operating, he said, citing the examples of food, clothing, housing and transportation industries.
He pointed out that China earns more than $300 billion in annual trade with the United States. “If this export income is greatly reduced, it will have a huge impact on the Chinese economy,” he said.
A large number of factories that rely on exports to the United States may face a wave of closures, which will lead to large-scale unemployment, he added.
“Factories will be unable to repay bank loans, which will cause debt risks in the financial system. At the same time, the increase in the number of unemployed people will further hit domestic demand, creating a vicious cycle,” he added.
But experts warn there will also be negative effects on U.S. consumers, who have grown used to low-cost products made in China, and U.S. manufacturers that rely on inputs from China to sustain their business.
In 2024, U.S. exports to China stood at $143.5 billion, while imports totaled $439.9 billion, according to the Office of the U.S. Trade Representative.
According to research published Thursday by The Budget Lab at Yale, Trump’s latest tariffs would hurt average American households, costing them $4,700 annually.
RFA Mandarin journalist Huang Chun-mei contributed reporting. Edited by Mat Pennington.
This content originally appeared on Radio Free Asia and was authored by Tenzin Pema and Huang Chun-mei for RFA.