Summary
Trump escalated his trade war with China by raising tariffs to 125%, even as he dropped tariffs on other nations to ease recession fears.
China retaliated with 84% tariffs on U.S. goods, triggering a high-stakes standoff with both sides refusing to back down.
Experts warn the escalating tit-for-tat threatens global markets and diplomacy. Trump’s team calls China a “bad actor,” while Beijing frames the U.S. as a bully.
Each side believes time favors them, making de-escalation unlikely. Business leaders urge talks, but neither leader wants to appear weak.
Many analysts think that the bond selling is what scared the Trump government, as they have said that they want to rebalance the economy, but not loose the $ hegemony. The Chinese hold a lot of bpnds, but haven’t threatened to sell th yet - the Japanese sold US bonds.
The Chinese and the Americans need each other. The Americans can’t afford to make things, and the Chinese need the American market to buy things, as they make too many things. The Chinese can’t afford to have the US market disappear yet.