On Friday, China announced a sharp increase in tariffs on U.S. goods, bringing the rate to 125%. However, Beijing stated that it would ignore any further tariff hikes from President Donald Trump, arguing that additional tariffs no longer make economic sense for Chinese importers. This decision followed a tumultuous week in global markets, where the U.S. and China took turns imposing trade barriers, escalating their ongoing trade conflict.

China’s finance ministry made it clear that at current tariff levels, there is no demand in the Chinese market for U.S. products. The Chinese government characterized the continuous escalation of tariffs as nothing more than a “numbers game” with no real economic benefit. According to the commerce ministry, the U.S. approach has become a political tool with no meaningful economic foundation.

“If the U.S. continues to play the tariff numbers game, China will ignore it,” a spokesperson stated, underscoring China’s commitment to dismissing further U.S. actions.

Trump’s Tariff Strategy and Market Reactions

Despite the market turmoil, President Trump defended his tariff strategy, acknowledging the “transition costs” but remaining confident in the long-term outcomes. Trump has repeatedly downplayed the global market disruptions caused by his policies, calling the turmoil “a beautiful thing” in the end. He praised the European Union for withholding retaliatory tariffs after the U.S. announced its suspension of tariffs on China, but he also hinted that the EU’s patience might not last.

European Commission President Ursula von der Leyen responded cautiously, stating that the EU still has “a wide range of countermeasures” ready if talks with the U.S. stall. French President Emmanuel Macron also voiced his concern, urging the EU to prepare for potential actions in response to the U.S. tariffs, as the pause is temporary.

China Seeks EU Partnership and International Cooperation

President Xi Jinping has urged greater cooperation between China and the European Union in opposing U.S. trade tactics. In a meeting with Spanish Prime Minister Pedro Sanchez, Xi emphasized that both China and Europe should fulfill their international duties and resist “unilateral bullying practices” by the U.S.

Xi highlighted that this partnership would not only protect their respective rights and interests but also promote global fairness and justice. His statement underscores China’s broader diplomatic efforts to rally global support against U.S. policies.

Global Market Strain and Reactions to Rising Tariffs

The global financial markets have struggled under the weight of the escalating trade war. Following significant declines on Wall Street, Asian markets also felt the pressure. Tokyo saw a drop of over 4%, while other major markets, including Sydney, Seoul, and Singapore, experienced losses. European markets also reacted negatively to China’s latest round of tariffs.

As investors sought safety from the uncertainty, gold prices soared, hitting a record high above $3,200. Meanwhile, oil prices and the U.S. dollar fell, reflecting concerns about a global economic slowdown due to the ongoing trade dispute.

Stephen Innes of SPI Asset Management remarked, “The sugar high from Trump’s tariff pause is fading fast. The bottom line is that the world’s two largest economies are locked in a full-blown trade war, and there are no winners.”

Criticism of Trump’s Trade War and Economic Impact

Critics argue that Trump’s tariffs are creating chaos for global supply chains, alienating key allies, and increasing costs for U.S. consumers. Howard Lutnick, Trump’s commerce secretary, remains optimistic, calling the tariffs a prelude to a “Golden Age” for the U.S. economy. He emphasized the importance of protecting U.S. interests and engaging in global negotiations, suggesting that the trade war is part of a larger strategy to reshape the global economy.

However, Trump himself has warned that if a satisfactory trade deal is not reached within 90 days, the tariffs could return. “If we can’t make the deal we want, then we’d go back to where we were,” he stated, leaving the door open for further escalation.

International Reactions and Diplomatic Developments

As the trade war intensifies, international players are adjusting their strategies. Canadian Prime Minister Mark Carney welcomed Trump’s temporary tariff pause, describing it as a “welcome reprieve” for global markets. Carney confirmed that Canada would begin negotiations with the U.S. on a new economic deal following elections on April 28.

Meanwhile, Vietnam has agreed to open trade talks with the U.S., and Pakistan is sending a delegation to Washington to discuss economic relations. As President Xi looks to strengthen alliances against the U.S. trade war, he will travel to Vietnam, Malaysia, and Cambodia next week, with trade issues expected to dominate the agenda.