US-China trade war intensifies

The US-China trade war escalated sharply this week.

Hours after President Donald Trump’s reciprocal tariffs went into effect on Wednesday, he placed a 90-day pause on all countries except China. It saw the duty increase to 125% after the Southeast Asian nation placed a retaliatory tax on US imports.

Recently, the White House confirmed that it updated the tariff on Chinese imports to 145%, triggering global economic disruption.

Trump claims the hikes will protect American jobs and manufacturing, but early signs show severe economic strain.

Trade between the two countries—valued at $582 billion—is slowing and could even shut down. Shipping data shows a 25% drop in container bookings across the Pacific. On Thursday, US stocks fell sharply as investors reacted to the escalating tensions.

Even businesses are pulling back. American factories are canceling orders, while Chinese manufacturers are cutting hours or halting production.

China, which relies on the US for up to 80% of exports in some sectors, is seeing mass order cancellations, with analysts predicting 10–20 million job losses in trade-related industries.

The effect on the US
Chinese factories producing Christmas decorations and other holiday goods warn of delayed shipments and seasonal shortages as US retailers have not yet placed orders. More than 85% of the US Christmas decor comes from Chinese factories, which rely on American consumers for sales.

Hollywood may also feel the blow as China considers limiting US movie imports, a market worth billions of dollars.

With rising layoffs and strained global supply chains, fears of long-term economic damage are growing.

Analysts at HSBC estimate the trade war could shave 2 percentage points off China’s growth. With both economies deeply interconnected, the global ripple effects are just beginning—affecting supply chains, prices, and jobs.