The trade war between the United States and China has intensified, with the White House announcing on April 16, 2025, that China now faces tariffs of up to 245% on certain goods, up from the previous 145% rate. This sharp increase, attributed to China’s “retaliatory actions,” marks a significant escalation in the ongoing economic conflict.
The White House detailed that President Donald J. Trump, on his first day back in office, implemented a 10% tariff on all countries, with higher rates targeting nations like China, which the U.S. accuses of unfair trade practices. The 245% tariff specifically addresses China’s countermeasures, including its recent 34% tariff on all U.S. goods, announced on April 4, 2025, by China’s Finance Ministry.
China’s Defiant Response
China has responded with defiance, dismissing the 245% tariff as a “numbers game” and vowing to “fight until the end.” Beijing’s Commerce Ministry has filed another lawsuit with the World Trade Organization (WTO), arguing that the U.S. tariffs violate international trade rules.
Additionally, China has taken concrete retaliatory steps, such as halting exports of critical rare materials to the U.S., signaling its intent to leverage its dominance in global supply chains. This move targets key industries, including those reliant on processed critical minerals and derivative products like semiconductors, batteries, and electric vehicles, which are vital to both nations’ economies.
Trump’s “Fair and Reciprocal Plan” Drives Policy
The U.S. tariffs are part of President Trump’s broader “Fair and Reciprocal Plan,” announced on February 13, 2025, aimed at correcting trade imbalances. The plan highlights disparities, such as Brazil’s 18% tariff on U.S. ethanol exports compared to the U.S.’s 2.5%, which contributed to a $200 million trade imbalance in 2024.
The White House argues that such imbalances, combined with China’s excess production of materials like steel and aluminum, threaten U.S. national security and economic stability. To address this, Trump has maintained a 25% tariff on steel and aluminum and signed proclamations to close loopholes, ensuring domestic industries are protected.
National Security and Critical Minerals in Focus
The White House has also emphasized national security concerns, particularly regarding overreliance on foreign critical minerals. A fact sheet released on April 15, 2025, announced a Section 232 investigation to assess the risks of importing processed critical minerals and derivative products.
The investigation shows the need for a resilient U.S. manufacturing base to reduce dependence on regions like China, which dominates production of these materials. This aligns with broader U.S. efforts to safeguard economic stability amidst geopolitical tensions.
Global Economic Fallout Looms
The escalating U.S.-China trade war has sparked fears of a global economic downturn. On April 11, 2025, Chinese leader Xi Jinping warned, “There are no winners in a tariff war,” during a meeting with Spanish Prime Minister Pedro Sanchez. Economists, such as Jennifer Lee from BMO Capital Markets, have cautioned that the intensifying conflict could push the global economy into a recession.
With the U.S.-China trade relationship—valued at $582.4 billion in goods in 2024—under unprecedented strain, the world braces for the broader implications of this economic standoff as both nations stand firm in their positions.
