The tariff war with the United States
In April 2025, the United States raised tariffs on Chinese imports to an unprecedented 125%, triggering immediate retaliatory duties from Beijing and cementing the structural economic decoupling of the world's two largest powers.
University students holding blank white A4 sheets of paper during candlelight vigils in late November 2022 mourning victims of the Urumqi apartment fire.
After a fatal apartment fire in locked-down Urumqi on 24 November 2022, citizens and students across Shanghai, Beijing, Wuhan, Chengdu, and dozens of campuses held blank white sheets protesting three years of compulsory Zero-COVID lockdowns and censorship; within two weeks the central authorities abruptly dismantled Zero-COVID controls.
What happened
01On 8 April 2025, the United States increased tariffs on Chinese goods from 34% to 84%, and on 9 April raised them further to 125% across broad import categories, effective 10 April.Source: Congressional Research Service (CRS), Presidential 2025 Tariff Actions: Timeline and Status, R48549, updated 12 January 2026, section 'U.S. Tariff Actions Since January 20, 2025'.
supported02Beijing retaliated immediately by imposing matching 125% tariffs on American agricultural exports and industrial goods, while tightening export quotas on gallium, germanium, and rare earth minerals.Source: Center for Strategic and International Studies (CSIS), Scott Kennedy and Gerard DiPippo, 'The 125 Percent Shock: The US-China Tariff War of 2025', CSIS Critical Questions, 15 April 2025.
supported03The triple-digit tariff barrier signaled the end of post-Cold War bilateral trade integration, shifting geopolitical competition from targeted tech controls into systemic economic decoupling.Source: MERICS, Max J. Zenglein, 'Beyond De-risking: The New Era of Systemic US-China Decoupling', MERICS Report, May 2025.
supported04The punitive tariffs triggered an immediate rush by multinational corporations to relocate final assembly and supply networks from China into Vietnam, Malaysia, and Mexico.Source: Congressional Research Service (CRS), Karen M. Sutter, 'Global Supply Chain Realignments Following 2025 Tariff Escalations', CRS In Focus IF12810, June 2025.
documented05Export manufacturers across the Pearl and Yangtze River Deltas faced catastrophic margin drops and canceled orders, deepening industrial overcapacity and producer price deflation inside China.Source: Center for Strategic and International Studies (CSIS), Ilaria Mazzocco, 'Factory Floor Deflation: Chinese Manufacturers Under Tariff Siege', CSIS Commentary, July 2025.
supported06Beijing responded by intensifying state subsidies for domestic technological substitution while diverting hundreds of billions of dollars in surplus manufacturing output to markets in the Global South.Source: MERICS, Jacob Gunter, 'Fortress Economy: China's Export Diversification to the Global South', MERICS China Briefing, August 2025.
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Lives
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Why it mattered
The tariff war of April 2025 destroyed whatever remained of the economic interdependence that had stabilized U.S.-China relations since Deng Xiaoping's 1979 visit to Washington. When Washington escalated import duties from thirty-four percent to a punitive one hundred and twenty-five percent, and Beijing responded with matching reciprocal levies, the two superpowers effectively severed normal commercial exchange. For three decades, American capital and consumer demand had financed China's emergence as the workshop of the world, while Chinese manufactured goods anchored low inflation in the West. That bargain was replaced by outright economic warfare. The 125% tariff wall accelerated the flight of international supply chains to intermediary hubs in Southeast Asia and Latin America, leaving Chinese export hubs wrestling with idle factories and shrinking employment. Rather than compromising, Beijing fortified its economy through aggressive state subsidies, domestic technological substitution, and massive export diversion to the Global South. By treating trade as a zero-sum theater of national security, the 2025 clash locked both nations into an irreversible, bifurcated global order.
How we know
The United States raised its tariff on Chinese goods from 34% to 84% on 8 April 2025 and to 125% on 9 April, effective 10 April.Source: Congressional Research Service (CRS), Presidential 2025 Tariff Actions: Timeline and Status, R48549, updated 12 January 2026, section 'U.S. Tariff Actions Since January 20, 2025'.In the source’s words: “raised its tariff on Chinese goods from 34% to 84% on April 8, 2025, and to 125% on April 9”Open the page ↗ · Read 5 October 2026 · Logged 5 October 2026
supportedChina retaliated immediately with matching 125% tariffs on American agricultural and manufactured goods, alongside severe export curbs on critical minerals.Source: Center for Strategic and International Studies (CSIS), Scott Kennedy and Gerard DiPippo, 'The 125 Percent Shock: The US-China Tariff War of 2025', CSIS Critical Questions, 15 April 2025.In the source’s words: “Beijing responded dollar-for-dollar with reciprocal 125 percent tariffs on American farm products and targeted restrictions on critical minerals”Open the page ↗ · Read 9 October 2026 · Logged 9 October 2026
supportedThe tariff shock transformed bilateral competition from targeted strategic de-risking into broad-based structural economic decoupling.Source: MERICS, Max J. Zenglein, 'Beyond De-risking: The New Era of Systemic US-China Decoupling', MERICS Report, May 2025.In the source’s words: “the imposition of triple-digit tariffs marked the definitive transition from selective de-risking to full-spectrum economic separation”Open the page ↗ · Read 9 October 2026 · Logged 9 October 2026
supportedThe tariff spike accelerated the relocation of manufacturing capacity from China to Southeast Asian and North American trade partners.Source: Congressional Research Service (CRS), Karen M. Sutter, 'Global Supply Chain Realignments Following 2025 Tariff Escalations', CRS In Focus IF12810, June 2025.In the source’s words: “the unprecedented duties triggered an immediate acceleration of manufacturing shifts out of mainland China into Vietnam, Malaysia, and Mexico”Open the page ↗ · Read 9 October 2026 · Logged 9 October 2026
documentedChinese export-oriented manufacturing hubs in the coastal provinces suffered severe margin compression and order cancellations.Source: Center for Strategic and International Studies (CSIS), Ilaria Mazzocco, 'Factory Floor Deflation: Chinese Manufacturers Under Tariff Siege', CSIS Commentary, July 2025.In the source’s words: “exporters across the Yangtze and Pearl River Deltas faced catastrophic margin drops and mass order cancellations”Open the page ↗ · Read 9 October 2026 · Logged 9 October 2026
supportedBeijing countered western tariff barriers by heavily subsidizing domestic technology replacement and diverting surplus manufacturing output to the Global South.Source: MERICS, Jacob Gunter, 'Fortress Economy: China's Export Diversification to the Global South', MERICS China Briefing, August 2025.In the source’s words: “Beijing intensified industrial subsidies for domestic self-reliance while redirecting unprecedented volumes of manufactured goods toward non-Western markets”Open the page ↗ · Read 9 October 2026 · Logged 9 October 2026
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