China has retaliated against U.S. President Donald Trump’s tariffs by raising its duties on U.S. imports to 125% from 84% previously.
The U.S. and China are engaged in a tit-for-tat trade war that saw the Trump administration ratchet up its tariffs on Chinese imports to 145% on April 10.
In a news release, the Chinese government in Beijing said: “Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke…”
China’s government added that “with tariff rates at the current level, there is no longer a market for U.S. goods imported into China.”
What started out as the U.S. imposing what it called “reciprocal tariffs” on 100 countries worldwide has turned into an escalating bilateral trade war between the U.S. and China.
Analysts are now trying to assess the damage that will be done to the world’s two biggest economies from the trade war and what it could mean for the global economy.
Currently, there are no signs that the two governments want to start negotiations and avoid major disruptions in global supply chains and to various companies.
Hopes for a quick U.S.-China deal to resolve the trade tensions have faded as Beijing has hit back against American import duties.
Wall Street investment bank Goldman Sachs (GS) has cut its China GDP growth forecast this year to 4% given the drag from U.S. trade tensions and slower global growth.
While Chinese exports to the U.S. only account for about three percentage points of China’s GDP, that’s still a significant impact, according to Goldman Sachs.
China on Friday reiterated that it will continue to “resolutely counter-attack and fight to the end” if the U.S. continues to infringe on China’s interests.
The government in Beijing has also announced that it is limiting its imports of Hollywood films as part of the country’s escalating trade war with the U.S. That’s bad news for American entertainment companies such as Walt Disney Co. (DIS).