China raised tariffs to 125% and escalated the trade war with the United States

China raised its tariffs on imports of American products to 125%, as a direct response to President Donald Trump's recent decision to increase tariffs on Chinese products to 145%, representing the most significant escalation so far in the trade war between the world's two largest economies.

The measure was announced by the Chinese Ministry of Finance, which described the U.S. tariff policy as a serious violation of international trade rules, "unilateral," "coercive," and "a joke" in the history of the global economy. According to Beijing, these decisions go against basic economic principles and reflect an act of economic intimidation.

Experts and analysts state that with tariffs over 35%, the trade of goods between both countries becomes practically unfeasible.

The current tariffs average 135% for Chinese products entering the United States, according to the Peterson Institute for International Economics, eliminating any profit margin for exporters. Both nations have now taxed 100% of their exchanged products, leading to the effective collapse of bilateral trade.

Although China said it has no intention of further escalating with new tariffs, it left the door open to other forms of retaliation.

In fact, it has already restricted the entry of Hollywood movies and issued warnings to its citizens about the risks of traveling or studying in the United States, especially in the state of Ohio.

Additionally, it filed a new complaint with the World Trade Organization (WTO) against the latest U.S. tariff hikes, despite the fact that it was the Asian country that initiated the trade war.

In financial markets, the yuan fell to levels not seen since the global financial crisis of 2008, although it experienced a slight recovery following Beijing's official response.

Meanwhile, Trump had announced a 90-day suspension of new tariffs for countries that haven't retaliated against the United States, in an apparent attempt to consolidate alliances.

In response, China has intensified its trade diplomacy, seeking the support of strategic partners. President Xi Jinping spoke with Spanish Prime Minister Pedro Sánchez, advocating for a common stance with the European Union to oppose "unilateral acts of intimidation."

In parallel, Chinese Commerce Minister, Wang Wentao, has held talks with representatives from the EU, Malaysia (current ASEAN president), Saudi Arabia, and South Africa, aiming to strengthen relations with the G20, BRICS, and the Arab world.

Additionally, Beijing and Brussels agreed to resume talks on trade reliefs and negotiate price commitments on electric vehicles, a gesture that could end a prolonged conflict with Europe, thus focusing the trade front solely against Washington.

China reiterated that it is still open to dialogue with the United States, but warned that it will not respond to ''threats or pressures.'' "If the United States insists on substantially infringing on China's interests, it will respond firmly to the end," warned the Chinese Ministry of Commerce.