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U.S.-China Trade War Escalates as Trump Raises Tariffs to 125% on Chinese Imports

by Team Lumida
April 10, 2025
in Macro
Reading Time: 4 mins read
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Key Takeaways:

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  • President Trump raised tariffs on Chinese imports to 125%, effectively closing the U.S. to its third-largest supplier of goods.
  • In 2024, the U.S. imported $438.9 billion worth of goods from China, representing 13.3% of total U.S. imports.
  • The U.S.-China trade deficit reached $295.4 billion in 2024, up 6% from 2023, with total trade between the two nations amounting to $582.5 billion.
  • Key imports from China include smartphones, computers, toys, and video game consoles, which accounted for 55.5% of U.S. imports from the country.

What Happened?

President Trump escalated the U.S.-China trade war by imposing a 125% tariff on Chinese imports, while maintaining a 10% baseline tariff on virtually all imports. The move comes as part of Trump’s broader strategy to address trade imbalances and target countries deemed “bad actors” on trade.

China, the third-largest supplier of goods to the U.S., accounted for 13.3% of total U.S. imports in 2024, with key categories including electronics, machinery, and toys. The U.S. imported $438.9 billion worth of goods from China last year, while exporting $143.5 billion, resulting in a trade deficit of $295.4 billion.


Why It Matters?

The 125% tariff on Chinese goods marks a significant escalation in the trade war, with far-reaching implications for global supply chains, consumer prices, and economic growth. Products like smartphones, computers, and toys, which dominate U.S. imports from China, are likely to see sharp price increases, impacting American consumers and businesses.

The U.S.-China trade deficit, which has been a focal point of Trump’s trade policies, remains substantial despite recent shifts in trade patterns. The new tariffs are expected to further strain the already fragile relationship between the world’s two largest economies.


What’s Next?

The 125% tariff on Chinese imports is likely to prompt retaliation from Beijing, potentially escalating the trade war further. Businesses and consumers will face higher costs as supply chains adjust to the new trade environment.

Observers will closely monitor the impact of the tariffs on U.S.-China trade volumes, as well as any potential negotiations or policy shifts aimed at de-escalating tensions. The broader implications for global trade and economic stability will also be a key area of focus.

Source
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Lumida's website (referred to herein as the "Website") is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Website on the Internet should not be construed by any client and/or prospective client Lumida’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.

Any subsequent, direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

‍Lead Capture Forms: By submitting your contact information in the forms on this site, you are not obligated to invest in Lumida's product or services.
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