China hits back at Trump's tariff hike with 125% duties on U.S. goods

Beijing on Friday increased its tariffs on U.S. imports to 125 per cent, hitting back against U.S. President Donald Trump's decision to hike duties on Chinese goods to 145 per cent, raising the stakes in a trade war that threatens to upend global supply chains. The countermeasures take effect on Saturday.

The hike comes after the White House kept the pressure on the world's No. 2 economy and second-biggest provider of U.S. imports by singling it out for an additional tariff increase, having paused most of the "reciprocal" duties imposed on dozens of other countries for 90 days.

"The U.S. imposition of abnormally high tariffs on China seriously violates international and economic trade rules, basic economic laws and common sense and is completely unilateral bullying and coercion," China's Finance Ministry said in a statement.

Beijing indicated that this would be the last time it matched the U.S., should Trump take his duties any higher. But it left the door open for Beijing to turn to other types of retaliation.

"Even if the U.S. continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics," the finance ministry said.

Trump told reporters at the White House on Thursday that he thought the United States could make a deal with China and said he respected Chinese President Xi Jinping.

"In a true sense he's been a friend of mine for a long period of time, and I think that we'll end up working out something that's very good for both countries," he said.

Xi, in his first public remarks on Trump's tariffs, told Spanish Prime Minister Pedro Sanchez during a meeting in Beijing on Friday that China and the European Union should "jointly oppose unilateral acts of bullying," China's state news agency Xinhua reported.

"There are no winners in a trade war," the Chinese leader told his guest, adding that by acting together, the world's second-largest economy and the 27-strong European trade bloc could help uphold "the global rules-based order."

Global stocks fell, the dollar slid and a sell-off in U.S. government bonds picked up pace on Friday, reigniting fears of fragility in the world's biggest bond market. Gold, a safe haven for investors in times of crisis, scaled a record high.

Xi will visit Vietnam from April 14 to 15, and Malaysia and Cambodia from April 15 to 18, state-run Xinhua news agency said on Friday, after the Chinese president pledged this week to deepen "all-round co-operation" with China's neighbours.

In a stunning reversal, U.S. President Donald Trump said on Wednesday he would temporarily lower the hefty duties he had just imposed on dozens of other countries while further ramping up pressure on China.

Trump put a 90-day pause on the "Liberation Day" tariffs and put down a 10 per cent baseline tariff for more than 75 countries instead.

Several other Asian countries were looking at some of the highest tariffs before the pause, including Vietnam.