By Steve Goldstein
China says another U.S. tariff hike would be a ‘joke’
China on Friday fired back for what it said was the final time.
China’s finance ministry raised its tariffs on the U.S., to 125%, from 84%, as the tit-for-tat continues. The China tariffs are effective on April 12.
“Given that at the current tariff level, there is no market acceptance for U.S. goods exported to China, if the U.S. continues to impose tariffs on Chinese goods exported to the U.S., China will ignore it,” said the finance ministry.
On Thursday, the U.S. clarified that tariffs on China are 145% – 125% based on retaliatory measures and another 20% related to fentanyl.
“Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the finance ministry added. It again repeated the phrasing that China will “fight to the end.”
Rory Green, chief China economist at TS Lombard, agreed that at a certain point, it doesn’t matter how high China tariffs go.
“With tariffs at 54%, most models – including our own – have exports to the U.S. falling almost to zero,” he said in a research note. He calculated the total damage from the 2025 tariffs to roughly 2.2 percentage points off its GDP. “A large hit but one that Beijing is capable of offsetting,” he says.
Friday saw more volatile action in financial markets. Up as much as 463 points, Dow futures (YM00) turned sharply lower, and then were rising once again.
The U.S. dollar DXY however was declining sharply.
The yield on the 10-year Treasury BX:TMUBMUSD10Y was steady.
The dollar was weaker vs. the offshore Chinese yuan (USDCNH), easing to 7.2993 yuan, which is still near a record high.
-Steve Goldstein
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(END) Dow Jones Newswires
04-11-25 0719ET
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