In a significant escalation of the ongoing trade war between the world’s two largest economies, China has raised tariffs on all US goods from 84% to 125%, effective April 12. This move comes in direct retaliation to President Donald Trump’s recent increase of levies on Chinese goods to 145%, creating unprecedented global uncertainty in international trade relations.
The Chinese Ministry of Finance announced the dramatic tariff increase on Friday, marking a new phase in the rapidly deteriorating US-China trade relationship. According to Bloomberg, Beijing has indicated it will not increase tariffs beyond the current 125% level, with a Commerce Ministry spokesperson stating: “If the US insists on continuing this numbers game with tariffs, China will not engage. However, if the US persists in substantively harming China’s interests, China will resolutely take countermeasures and fight to the end.”
Professor David Monyae, Director of the University of Johannesburg’s Centre for Africa-China Studies, warns that this escalating global uncertainty extends far beyond bilateral relations.
“On a daily basis, he’s taking action that the world cannot keep up with. The impact is massive, particularly on trade. The trade war on China has huge implications, not only between the two countries but the rest of the world and, more importantly, our continent,” Monyae said in an interview with Salaamedia.
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Markets React to Growing Uncertainty
Financial markets have responded sharply to the growing global uncertainty. The major US stock indexes dropped significantly on Thursday, with the tech-heavy Nasdaq Composite falling as much as 7.2% at one point, while the S&P 500 fell 6.3%. By closing, the Nasdaq was down 4.3%, the S&P 500 down about 3.5%, and the Dow Jones Industrial Average had dropped 1,000 points, or about 2.5%, according to NBC News.
The S&P 500 is now approximately 14% below its February highs, reflecting investor concerns about the unpredictable nature of trade policy and its potential to slow global economic growth.
Systemic Implications for Global Order
Professor Monyae believes the current situation reflects deeper structural issues in the international system.
“The entire system of capitalism is built on trust. If you start knocking and having a trust deficit, particularly with strategic partners of the United States and an important country such as China, it will have quite a huge impact on the post-1945 world order,” he explained.
The international relations expert emphasized that the current global uncertainty undermines the foundations of international commerce.
“Trade and so many other things we all know require certainty, rules of the game, norms and values that need to be pursued jointly through organisations such as the United Nations and the agencies … where disputes are resolved and common positions are taken,” Monyae noted.
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Long-Term Consequences
While Trump has paused his “reciprocal” tariffs on many countries for 90 days, the baseline 10% tariff on most imports remains in place, along with the escalated tariffs on China. This has created a climate of uncertainty for businesses worldwide.
According to the BBC, analysts warn that when tariffs are applied and removed seemingly at the president’s whim, companies both in the US and abroad are more likely to “hunker down and wait for the dust to settle before making any big commitments.”
Professor Monyae sees the current trade tensions as part of a longer historical process.
“The US crisis did not start with Donald Trump; Donald Trump is a trigger. He’s accelerating a process that started with the global financial crisis of 2008 … The decline is not a big bang – it’s happening slowly, brick-by-brick. All these actions are accelerating that process,” he said.
Looking ahead, Monyae predicts extended consequences: “It will take 10, 20, 30 years, slowly losing certain advantages in certain areas. What he has done is undermining the US dollar, undermining relations, undermining institutions of global governance, and in the end increasing the potential of a hot war whether with China or other countries. We are going to see the crisis moving to other areas, not just trade.”
As both nations dig in for what could be a prolonged economic confrontation, the ripple effects of this heightened global uncertainty will likely continue to impact markets, supply chains, and international relations worldwide.
