The US-China trade standoff has taken another turn for the worse after President Donald Trump signed proclamations to increase tariffs on Chinese imports, raising the total rate to 245%.
The executive order, announced by the White House on Tuesday, also includes reinstating the full 25% tariff on steel and matching the rate for aluminum to close existing loopholes and exemptions. It supposedly responds to what Trump has described as a “lack of respect” from China towards America.
Weeks of exchanging tariff rates leads to 245%
As explained in the White House Fact Sheet, the trade battle began after Trump took office, when he imposed a 20% tariff on Chinese goods. This was followed by a 34% levy on April 2 and an additional 50% duty shortly after China threatened to retaliate. These layers brought the cumulative US tariff burden on Chinese goods to 104%.
More than 75 countries have reportedly engaged in discussions to renegotiate trade deals, prompting a pause in these individualized tariffs, except in the case of China, which moved forward with its own retaliatory measures.
So let me get this straight.
You slap tariffs on China… then you raise them… then raise them again, which makes China slam us with massive retaliatory tariffs. Then you lift those tariffs for a few weeks like it’s a limited-time Netflix subscription, only to maybe bring them…
— Brian Krassenstein (@krassenstein) April 13, 2025
China countered by raising its tariffs on US goods by 84%, which prompted Trump to hike US tariffs to 125%. Last Friday, Beijing matched the increase, pushing its tariffs on American imports to 125% because the US had ratcheted its rate to 145% last Thursday.
“China now faces up to a 245% tariff on imports to the United States as a result of its retaliatory actions,” the White House release noted.
Executive orders on minerals, timber, and digital taxes
President Trump also signed several Executive Orders targeting foreign practices that the administration views as economically coercive. One such order launches investigations into the impact of imported copper, timber, and lumber products on US national security.
The administration argues that these materials are important to both the economic and defense sectors but are largely sourced from adversarial nations.
POTUS has mandated the Secretary of Commerce Howard Lutnick to initiate a Section 232 investigation under the Trade Expansion Act of 1962. The probe will assess national security risks associated with the US’s dependence on imported processed critical minerals and related products.
Trump wants Lutnick to identify supply chain vulnerabilities and solutions to reduce foreign reliance and promote domestic production. If the Secretary of Commerce finds that such imports do threaten national security, and the President agrees, a new tariff rate could replace the reciprocal rate currently in place, as per the April 2 order.
This week, Beijing suspended exports of six heavy rare earth metals and rare earth magnets. The components are imperative to global automakers, aerospace firms, chipmakers, and defense contractors, and have prompted a reaction from the POTUS.
“Foreign producers have engaged in price manipulation, overcapacity, and arbitrary export restrictions, using their supply chain dominance as a tool for geopolitical and economic leverage over the United States,” the White House asserted.
China grows economically in Q1
US tariffs weren’t enough to muffle China’s GDP growth, which posted a 5.4% uptick in the first quarter of the year, according to the National Bureau of Statistics. The figure outpaced both the full-year target and the 5.1% prediction made by analysts in a Reuters poll.
NBS Deputy Commissioner Sheng Laiyun commended the positive start but cautioned the economy about external pressures and weak domestic demand.
“The foundation for the economy to continue its rebound still needs to be solidified,” he said.
It would take a lot for Washington and Beijing to agree; both Trump and Xi Jinping are not known for backing down, and it does not seem like they will anytime soon.
“We don’t have to make a deal with them, they need our money,” Trump told reporters on Tuesday, placing the onus on China to reinitiate trade negotiations.
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