China said on Friday it would raise tariffs on US goods to 125%, retaliating against a fresh move by US President Donald Trump to increase duties on Chinese imports to 145%.
Beijing’s countermeasures are set to take effect on Saturday and come just a day after Washington imposed its highest tariffs yet on goods from the world’s second-largest economy.
The White House had temporarily suspended most reciprocal duties on dozens of other countries for 90 days, but singled out China for further penalties, intensifying a bilateral dispute that has rattled investors and complicated supply chains worldwide.
“The self-inflicted uncertainty from the China tariffs has turned the corporate capital expenditures world upside down,” said Wedbush’s Dan Ives.
“It’s created mass uncertainty not seen since COVID, created a price shock that will impact the daily lives of US consumers with no end in sight, and unfortunately ripped the hearts and lungs out of the US Big Tech supply chain.”
Analysts say the lack of clarity around exemptions for major American technology companies such as Apple, Amazon, Nvidia and Tesla has further fueled investor anxiety. “Negotiations are key,” Ives said. “But for now, it’s assume the worst and hope for the best as investors have no clue what the E is in P/E ratio.”
Markets have been particularly sensitive to signs of deteriorating US-China relations, given Beijing’s central role in global manufacturing and its significant holdings in U.S. Treasuries. Ives warned that China “holds a lot of cards in this game of poker,” pointing to the country’s long-term economic strategy and resilience in the face of short-term pressure.
“The Beijing/Xi mentality can withstand massive pain, does not have mid-term elections ever, and looks at the world over centuries, not one to two years,” he added.