US Slaps 145% Tariff on China; India In Exempted List While Japan, Others Rush to Negotiate

In a major escalation of trade hostilities, the United States has imposed a massive 145% tariff on Chinese imports, the White House confirmed on Thursday. This sweeping move is aimed at countering China's trade practices and responding to its retaliation against earlier U.S. tariffs.

The announcement comes amid already heightened tensions between the two economic superpowers and has rattled global markets.

The 145% tariff includes a 125% general duty and an additional 20% levy tied to China’s alleged role in the fentanyl crisis, bringing the total to an unprecedented level.

“The staggering U.S. tariffs on the world’s second-largest economy have triggered a tit-for-tat trade war that has unnerved global financial markets,” read a memo from the White House.

Meanwhile, countries like India, Vietnam, Taiwan, Thailand, Indonesia and Israel are under concessions from the US tariffs.

On the other hand, Countries like Japan, South Korea, the UK, Switzerland, Australia and Brazil are trying to negotiate with the US.

China Hits Back, But Talks Stalled

In retaliation, China has imposed tariffs of 84% on U.S. goods, effective immediately. Despite the sharp exchange of economic firepower, Beijing has refused to engage in negotiations.

Chinese authorities have declared they will “fight to the end” rather than seek dialogue, which has only pushed the U.S. administration to double down.

Global Impact and Market Reaction

The announcement sent shockwaves through the financial world. On Thursday, just a day after one of the biggest buying sprees in years, stocks tumbled sharply.

The S&P 500 Index dropped 3.5%, as investor optimism gave way to deep concern over growing trade instability.

The abruptness and lack of clarity surrounding Trump’s tariff rollout has further added to the market’s unease.

Also Read: S&P 500, Nasdaq, Dow Plunge as Donald Trump-Xi Trade War Escalates into Direct Clash

Tariff Confusion and Wider Reach

Adding to the complexity, President Donald Trump also imposed a blanket 10% import tax on all other trading partners—though this has been temporarily paused for 90 days to allow for bilateral trade negotiations.

These countries now face a ticking clock until July 9, after which the higher duties will automatically come into effect if no deals are reached.

Meanwhile, small packages from China, previously exempt, are now being targeted. Imports priced up to $800 will now face a 120% tax, up from a planned 90%, as per a Bloomberg report.

Additionally, postal item fees are rising: parcels arriving between May 2 and June 1 will be charged $100 per item, while those after June 1 will see a $200 per item fee.

Trade Balances and Export Data

While China remains a major exporter to the U.S., it is no longer the top source of American imports, having been overtaken by Mexico and Canada amid strained relations.

According to an AP report, in 2024, the U.S. exported $199 billion worth of goods to China, while China exported $463 billion to the U.S. Major U.S. exports included soybeans, aircraft, pharmaceuticals, and semiconductors, while imports from China were dominated by mobile phones, computers, toys, and clothing.