• U.S. tariffs on Chinese imports have risen to 145%, significantly impacting global trade, with experts warning this could halt most U.S.-China trade.
  • Markets slumped as the tariff hike included a 20% duty linked to fentanyl concerns, while China retaliated by raising tariffs on U.S. goods from 34% to 84%.
  • The Tax Foundation estimates these tariffs could generate $171.6 billion in federal tax revenue by 2025 but at the cost of higher consumer prices and strained international relations.

An increase in U.S. tariffs on Chinese imports, announced recently by President Donald Trump, has caused significant shifts in global trade dynamics. According to economist Erica York from the Tax Foundation, these elevated tariffs could essentially halt most trade between the United States and China. York explained on CNBC’s “The Exchange” that a triple-digit tariff rate, like the current 145%, makes trade nearly impossible for businesses. “There may still be some items without substitutes that companies will pay for,” she said, “but, overall, this level of tariff shuts most trade down.”

Markets React to 145% Tariff

On Thursday, markets slumped as news spread that the U.S. tariff rate on Chinese goods had risen to 145%. This figure includes a hike from 125% to 145%, along with a 20% duty tied to fentanyl-related concerns. The market had initially shown optimism following a temporary pause on tariffs for other countries, but the China-specific tariffs point to ongoing economic tension.

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York noted that despite the temporary reprieve for other nations, the China tariffs represent a significant financial burden. She added, “Tariffs at this scale bring back protectionist policies not seen since the 1940s. It’s a massive economic hit.”

Economic Impact of Tariffs

For context, the Tax Foundation estimates that President Trump’s tariffs could raise federal tax revenues by $171.6 billion in 2025, marking the highest tax increase since 1993. This policy surpasses tax hikes under past presidents, including both George H.W. Bush and Barack Obama. While the revenue increase is substantial, the broader economic costs—higher prices for consumers and strained international relations—remain a concern.

China’s Retaliatory Measures

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Meanwhile, China responded with its own tariff increases on U.S. imports, raising rates to 84% from 34%. These levies took effect the same day President Trump announced the temporary reduction for other nations. Despite rising tensions, China has stated it will not back down, even if the trade conflict escalates into a full-scale trade war.

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As the tariff debate continues, we want to hear from you. How do you think these trade policies will affect everyday Americans? Share your comments below.

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