China imposes 125% tariffs on US goods, escalating trade tensions
What's the story
In a major escalation of its ongoing trade war with the US, China has announced an increase in tariffs on American goods to 125% starting Saturday.
The move marks a steep rise from the previously set rate of 84%, and comes as a response to higher tariff hikes by the Donald Trump administration.
Beijing's State Council Tariff Commission announced that "the US's imposition of abnormally high tariffs on China seriously violates international trade rules, basic economic laws and common sense."
Trade war
Trump's tariffs on China stand at a steep 145%
Trump's overall tariff rate on Chinese goods coming into the US now stands at 145%.
While he announced on Wednesday that China would face 125% tariffs, this figure does not account for an additional 20% levy imposed due to China's alleged involvement in fentanyl production.
The escalating trade war has led to significant volatility in global financial markets. Gold prices have surged to record levels amid rising concerns over geopolitical tensions and economic instability.
Legal action
China will also file lawsuit against US with WTO
China has also stated its intention to file another lawsuit with the World Trade Organization (WTO) over the US tariff hikes, signaling a continued legal and economic standoff between the world's top two economies.
China's decision to raise tariffs on US goods comes at a time when its economy is grappling with several challenges.
The country is facing difficulties in reviving growth due to a crisis in the property market and renewed deflationary pressure.