China raises US tariffs to 125%; Trump pauses tariffs on electronics, intensifying trade conflict.

In Short

China has increased tariffs on US goods to 125%, heightening trade tensions, while Trump’s administration has paused new tariffs for 90 days.

This trade war impacts US stock markets, military contractors, and consumer confidence, as the UK introduces measures to lessen the effects of American tariffs.

China has raised tariffs on US goods to 125%, escalating trade tensions amid President Trump’s tariff policies. These measures take effect Saturday and are expected to further impact US stock markets and investor sentiment.

Despite the intensification of the trade war, the Trump administration has implemented a 90-day pause on new steep tariffs, with Treasury Secretary expressing confidence in reaching better trade agreements.

Rare earth mineral exports from China have been halted, posing risks to various industries, particularly American military contractors. The Chinese government has also restricted exports of essential materials, which could disrupt production in the US.

Trade measures

In the UK, trade measures have been introduced to alleviate the burden of US tariffs on British goods, estimating savings of £17 million annually for businesses. US soybean farmers are particularly vulnerable, facing significant losses due to the new tariffs, as China diversifies its sources of agricultural imports.

Recent developments also reveal that many electronics, such as smartphones and laptops, have been exempted from tariffs, benefiting tech companies reliant on Chinese imports. However, uncertainty remains high, impacting consumer confidence and spending.

The situation has led to decreased American consumer sentiment, with expectations of rising inflation and economic slowdowns voiced by Federal Reserve officials.