China announced on Friday that it will raise tariffs on U.S. imports from 84% to 125%, further escalating the trade war between Washington and Beijing.
The move is largely symbolic. As former Commerce Secretary Wilbur Ross told Fox News host Larry Kudlow on Thursday night, once tariffs hit 50%, further increases have limited practical impact. At that point, Ross explained, leaders effectively signal that they no longer seek a trade relationship.
China’s Ministry of Finance issued a statement that read:
The US’s imposition of abnormally high tariffs on China seriously violates international economic and trade rules, and also violates basic economic laws and common sense. It is a completely unilateral bullying and coercive practice.Given that at the current tariff level, there is no market acceptance for U.S. goods exported to China, if the U.S. continues to impose additional tariffs on Chinese goods exported to the U.S., China will ignore it.
China expert Gordon Chang joined Fox News’ Maria Bartiromo on Thursday morning to discuss the mounting conflict between China and the U.S. Chinese President Xi Jinping, he claims, is in an increasingly difficult political position because he can’t do what “absolutely” must be done which is to open up the lines of communication.
“Picking up the phone and calling President Trump would be the economically rational thing to do,” Chang said, “but Xi Jinping has configured the Chinese political system so that only the most hostile answers are considered to be acceptable, which means he’s boxed himself in.”
“He can’t do that, because if he does, his Communist Party fellow leaders, they’re going to criticize him, so right now, China’s in a position where it can’t do what it absolutely needs to do.”
Chang, the author of Plan Red: China’s Project to Destroy America, said President Donald Trump is not afraid of Xi Jinping. He noted that China was already in a weakened position before Trump announced the new tariffs, adding that the country is currently experiencing its own version of the 2008 financial crisis.
“The Chinese don’t have any cards in this,” he explained. “They’re only holding a pair of twos and Trump has a royal straight flush. The Chinese think they can intimidate Trump, they can coerce him into surrendering preemptively.” But Trump is not backing down.
Contrary to assertions from Chinese Communist Party sources that their economy is growing at a rate of 5%, Chang suggests the true rate is around zero:
We see from the price signals it’s in a deflationary spiral down which is inconsistent with the 5-point growth that they reported for last year.This is coming at a time when China is having its own 2008. In 2008, they didn’t want to have a recession, so they overstimulated their economy. They’ve accumulated all this debt. They don’t know what to do with it because this debt is internal which means if you try to resolve it, local parties are going to get hurt. They don’t have the political will to do that.They’ve got their 2008. They’ve got Trump on tariffs. They’ve got deglobalization. This is all hitting China at the same time. And they have no answers for it in Beijing.
As trade tensions escalate with China, Trump is taking steps to curb Beijing’s expanding influence in the Panama Canal region. On Wednesday, Fox News reported that Defense Secretary Pete Hegseth and Panama’s Minister for Canal Affairs signed a joint declaration reaffirming Panamanian sovereignty and detailing new avenues for military collaboration.
According to the report, the U.S. and Panama have formally entered into a new defense and security agreement designed to strengthen oversight of the Panama Canal—an initiative Defense Secretary Pete Hegseth described as essential for countering China’s expanding influence in the region.
The Canal Authority emphasized that the agreement “reaffirms respect for and recognition of Panamanian sovereignty over the interoceanic waterway.”
The pact also reinforces both countries’ commitment to the Neutrality Treaty and the legal framework guiding canal operations, including Panama’s Constitution, the treaty provisions, and the Organic Law governing the Canal.
Xi either cannot—or will not—work with Trump toward a compromise, instead vowing to “fight to the end.”
Meanwhile, 75 countries have already reached out to the White House to initiate trade negotiations. In just over a week, Trump has established a baseline 10% tariff across all nations and managed to isolate China. To me, that sounds more like success than the onset of an international trade war.
He’s making progress toward leveling the international playing field. Yes, there may be short-term pain, but he’s clearly playing the long game.
Bartiromo remarked this week that it feels like the U.S. is engaged in a “soft war” with China. She’s right. And the trade war is just one of several issues straining the relationship.
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on X or LinkedIn.
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