Escalation in the US-China Trade War: US Imposes 145% Tariff on Chinese Goods, China Retaliates with a 125% Tariff, Global Markets in Turmoil

Taiwan • Business • 04/12 06:39
Escalation in the US-China Trade War: US Imposes 145% Tariff on Chinese Goods, China Retaliates with a 125% Tariff, Global Markets in Turmoil

On April 12, 2025, the US-China trade war intensified, with the US imposing a total tariff rate of 145% on Chinese products, and China retaliating with a 125% rate. This led to disruptions in global supply chains and financial markets. Taiwanese manufacturers experienced a surge in orders, air freight space was fully booked, and the Taiwan stock market experienced significant volatility. The US temporarily suspended reciprocal tariffs for 90 days on 75 countries, with Taiwan included in the first round of negotiations, requiring only a 10% tariff rate, prompting Taiwanese electronics and semiconductor companies to speed up shipments.

Key Updates

04/12 12:06

The US imposes a 145% tariff on Chinese products: CEO of an educational toy company in Illinois faces a $100 million tariff bill.

In April 2025, U.S. President Donald J. Trump announced a 145% tariff on Chinese imports, which shocked American importers and manufacturers. Rick Woldenberg, CEO of Learning Resources, an educational toy company based in Illinois, stated that the cost of tariffs would skyrocket from $2.3 million in 2024 to $102 million in 2025, calling this change "doomsday." This policy led to retaliatory tariffs from China, which had a widespread impact on various U.S. industries, such as agriculture and retail.

04/12 10:08

US-China Trade War Escalates: Global Market Capitalization Loses $5 Trillion, Federal Reserve Prepares to Intervene

In April 2025, President Trump of the United States imposed a 145% tariff on Chinese goods, to which China responded with a 125% retaliatory tariff, escalating the U.S.-China trade war. This move triggered global financial market turmoil within 10 trading days, evaporating over $5 trillion in stock market value, and leading to a sell-off in U.S. Treasury bonds and the dollar. Federal Reserve officials indicated they were ready to intervene to stabilize the market, with inflation expectations soaring to their highest since 1981. The dollar index fell below 100, hitting a three-year low, reshaping global capital market confidence and order.

04/12 10:08

China's New Semiconductor Rule: 125% Tariff on U.S.-Manufactured Chips; Texas Instruments and Intel Stocks Fall.

On April 11, 2025, the China Semiconductor Industry Association issued a notice stipulating that the origin of imported chips will be determined by where the wafers are fabricated, impacting the range of the 125% tariff on U.S.-made chips. This policy caused a drop in the stock prices of American companies like Texas Instruments and Intel, with Texas Instruments closing 6.8% lower and Intel 3.7% lower. The new regulation significantly impacts the global semiconductor supply chain and trade dynamics.

04/12 07:37

Trump's equal tariff policy may cause the iPhone 16 Pro price to soar to NT$80,000, and experts warn that the risk of a U.S. economic recession has risen to 45%.

President Trump's "reciprocal tariffs" policy imposes a 145% tariff on imports from China, which could lead to the price of the Apple iPhone 16 Pro skyrocketing to NT$80,000. This policy has already had an impact on global supply chains and consumer markets, leading financial institutions like JPMorgan to warn about the risk of a U.S. economic recession, estimating a 45% probability. This article examines the policy's impact and expert opinions, highlighting the potential effects of tariffs on the U.S. economy and the prices of consumer electronics.

04/12 07:37

US-China Chip Tariff Dispute Escalates: Imposition of High Tariffs by 2025 Causes Global Market Turmoil and Price Hikes

In April 2025, President Trump of the United States imposed a 145% tariff on chips imported from China, and China countered with a 125% tariff on chips from the United States, leading to upheaval in the global semiconductor market. The prices of Chinese chips skyrocketed, resulting in a wave of panic buying, and many distributors halted price quotations. China's new regulation regards the wafer fabrication site as the place of origin, affecting U.S. manufacturers such as Intel and forcing companies to reevaluate their supply chain arrangements.

04/12 06:39

Escalation in the US-China Trade War: US Imposes 145% Tariff on Chinese Goods, China Retaliates with a 125% Tariff, Global Markets in Turmoil

On April 12, 2025, the US-China trade war intensified, with the US imposing a total tariff rate of 145% on Chinese products, and China retaliating with a 125% rate. This led to disruptions in global supply chains and financial markets. Taiwanese manufacturers experienced a surge in orders, air freight space was fully booked, and the Taiwan stock market experienced significant volatility. The US temporarily suspended reciprocal tariffs for 90 days on 75 countries, with Taiwan included in the first round of negotiations, requiring only a 10% tariff rate, prompting Taiwanese electronics and semiconductor companies to speed up shipments.

04/12 06:39

Trump's announcement of high tariffs has led to an escalation in the US-China trade war, causing volatility in global stock markets, resulting in Taiwan's stock market experiencing its largest drop in history.

In April 2025, President Trump of the United States imposed a 145% tariff on Chinese goods, and China retaliated by raising tariffs on American goods to 125%, escalating the U.S.-China trade war. Global stock markets were severely shaken, with Taiwan's stock market experiencing its largest single-day drop. Trump imposed a 32% tariff on Taiwanese goods, dealing a severe blow to exports, prompting the government to launch an NT$88 billion support plan. The U.S. dollar depreciated amid risk aversion, hitting new lows against the euro, yen, and Swiss franc. Taiwanese companies faced pressure to redirect orders and relocate production.

04/12 06:07

In 2025, the US-China tariff war heats up: India could be the winner, Taiwanese stocks soar, and Taiwanese businesses in Vietnam are under pressure.

In April 2025, the US-China trade war intensified as President Trump imposed a 145% tariff on Chinese goods, and China retaliated by raising its tariffs to 125%. This move caused global market turmoil and led to a conservative outlook for the US economy. Expectations for a Federal Reserve rate cut increased, which benefited long-term bonds. China initiated a plan to shift exports to domestic sales, and Taiwan's stock market rebounded thanks to the intervention of the National Stabilization Fund and favorable trade negotiations. Taiwanese businesses in Vietnam faced pressure from a 46% tariff and actively engaged in negotiations to adjust their strategies. India, with its low export dependency and flexible policies, was considered a potential beneficiary.

04/12 05:08

President Trump of the United States delays reciprocal tariffs by 90 days: begins trade talks with Taiwan and 15 other countries, with the goal of reaching 90 agreements.

On April 9, 2025, President Trump of the United States announced a 90-day pause on high reciprocal tariffs for most trade partners, excluding China, imposing only a 10% standard tariff rate. This decision was made in response to the willingness of 75 countries to negotiate. The Trump administration aims to finalize 90 trade agreements during this period, with Taiwan being part of the first round of negotiations, and a video conference with the United States set for April 11. Even though China is not on the suspension list, Trump remains optimistic about negotiating an agreement with China.

04/12 05:08

Experts: U.S. tariff policies may result in iPhones being made in the U.S., with prices possibly soaring to NT$80,000.

On April 12, 2025, the 145% reciprocal tariff policy promoted by President Trump of the United States posed a significant challenge to Apple Inc. Oliver, an economist at AMP in Australia, pointed out that if Apple moves its iPhone production line back to the U.S., the price could skyrocket to $2,519. This policy pressures Apple to restructure its supply chain and could potentially cut its annual profit by $40 billion. Economists warn that the risk of a U.S. recession has increased to 45%. Apple is taking steps to address this, such as expanding production in India and offering installment plans.

High Tariff Imposed by US and China, Trade Nearly Halted

On April 9, US President Trump announced that the "reciprocal tariff" on Chinese goods would be increased to 125%, adding to the previous 20% tariff imposed due to the fentanyl issue, bringing the total tariff rate to 145%. Trump stated on the social platform "Truth Social" that this is a response to China's "lack of respect for the global market."

On April 11, China's State Council Tariff Commission announced that the retaliatory tariffs on US goods would be raised from 84% to 125%. The Chinese Ministry of Commerce noted that at this rate, US goods have lost competitiveness in the Chinese market and stated that if the US continues to raise tariffs, China will no longer respond. China also filed a supplementary complaint with the World Trade Organization (WTO).

According to reports from Reuters and Deutsche Welle, analysts generally believe that this round of tariff measures has effectively stalled bilateral trade. The total US-China trade volume, which exceeded $650 billion in 2024, now faces the risk of a complete halt.

Urgent Orders Surge for Taiwanese Companies, Air Cargo Space Full

Under the US policy of temporarily suspending reciprocal tariffs for 90 days for multiple countries, Taiwan was included in the first round of negotiations and only needs to bear a 10% tariff, lower than the initially expected 32%. This move has led to a surge of urgent orders for Taiwanese electronics and semiconductor companies, with the goal of completing shipments within 90 days to avoid potentially restored high tariffs in the future.

Freight operators noted that demand for shipments from Southeast Asia and Taiwan has rebounded, with shipping companies reducing flights by 30%, leading to tight cargo space. According to the "Commercial Times," the latest Shanghai Containerized Freight Index (SCFI) has risen for three consecutive weeks, with space on routes from the Far East to the US West and East coasts fully booked, and a cargo space shortage is expected next week.

Taiwan Stock Market Experiences Volatility, Sets Historical Records

The Taiwan stock market experienced significant volatility this week. On April 7, influenced by news of the US initially imposing a 32% tariff on Taiwan, the market plummeted by 2,086 points in a single day, a 9.7% drop, marking the largest point drop and percentage decline in history, with a market value loss of 6.6 trillion NT dollars. On April 10, after Trump announced a suspension of tariffs on Taiwan, the market surged by 1,608 points, a 9.25% increase, also setting a record for the largest point and percentage gain.

Major electronics stocks like TSMC and Largan Precision also experienced significant fluctuations. TSMC's first-quarter revenue reached 839.2 billion NT dollars, the second-highest in history, but its stock price still experienced severe volatility due to market sentiment.

US Suspends Reciprocal Tariffs for 90 Days, Taiwan Included in First Round of Talks

The Trump administration announced a 90-day suspension of reciprocal tariffs for 75 countries, excluding China, with only a 10% base tariff rate imposed during this period. Taiwan and Israel were included in the first round of negotiations, which began on April 11. U.S. Trade Representative Greer stated that the negotiations will focus on tariff adjustment mechanisms and market reciprocity principles.

President Lai Ching-te confirmed Taiwan's inclusion in the first round of talks and urged attention to the US's concerns about "country of origin" issues. The Executive Yuan also approved an 88 billion NT dollar "Export Supply Chain Support Program" and is considering extending the tax filing deadline to help businesses cope with the tariff impact.

Experts Urge Government to Increase Response Measures to Avoid Unemployment Wave

Wang Jian-quan, Vice President of the Chung-Hua Institution for Economic Research, pointed out that the government should combine half of the excess tax revenue (about 250 billion NT dollars) with the existing 88 billion NT dollar plan to form a 338 billion NT dollar emergency fund to prevent large-scale unemployment. He emphasized that traditional industries will be the first to bear the brunt, and the government should promptly propose a "second phase upgrade and transformation plan."

The Taiwan People's Party Policy Committee also noted that information and communication, electronic components, and auto parts account for as much as 72% of Taiwan's exports to the US. If not properly addressed, it could severely damage export momentum.

References

People Also Ask...

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The US-China trade war is so intense, and Taiwanese manufacturers are seeing a surge in urgent orders. Could this impact the long-term trend of the Taiwan stock market?

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How can Taiwan leverage the 90-day grace period in the trade war between the US and China to strengthen its trade position?

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With the US-China trade war being so intense, how are Taiwanese companies responding?