April 11 2025

China Slaps 125% Tariffs on US Goods in Escalating Trade War

Tariffs Strain Massive US-China Trade in Key Sectors

Government Spending, on Autopilot, Soars Despite DOGE’s $150 Billion Cuts

House Passes Trump’s Budget Blueprint in Narrow 216-214 Vote

Battle for Eurasia Update: China Admits to US Cyberattacks, Ukraine Talks Stalled?

GET THE CITIZEN JOURNAL APP - FREE!

FLASH…Supreme Court Tells Government to Seek Return of Man Mistakenly Deported to El Salvador Prison…

1. China Slaps 125% Tariffs on US Goods in Escalating Trade War

China said it would increase additional tariffs on US goods to 125 per cent, in the latest escalation of the trade war between the world’s two biggest economies. China’s finance ministry said the increase from current additional levels of 84 per cent would take effect from April 12. But it added that it would ignore any further US tariff rises on Chinese exports, “given that at the current tariff level, there is no market acceptance for US goods exported to China”. The move is the latest in a weeklong tit-for-tat between the two countries that has seen US President Donald Trump’s administration isolate China after pausing some tariffs on other trading partners.
Source: Washington Post, Financial Times

2. Tariffs Strain Massive US-China Trade in Key Sectors

The market cheered when US President Donald Trump paused “reciprocal” tariffs on most countries on Wednesday; the S&P 500 rose by 9.5 per cent. Yesterday, the S&P gave back 3.5 per cent of that. It may need to give back some more. The ratcheting-up of tariffs on China leaves the US total effective tariff rate higher than it was before Trump flinched. According to Stephen Brown at Capital Economics, Trump’s promise of 125 per cent tariffs on China puts the US’s effective tariff rate at 27 per cent, the same level it would have been had yesterday’s 84 per cent tariffs on China and “reciprocal” tariffs on everyone else had been held steady. And Trump came out yesterday and clarified that the 125 per cent was new tariffs, not the total — putting the US tariff rate on China at 145 per cent (some have suggested it is a bit lower than that). So the US’s effective tariff rate is now hovering around 30 per cent. The US imports a lot of basic goods from China: 24 per cent of its textile and apparels imports ($45bn worth), 28 per cent of furniture imports ($19bn) and 21 per cent of electronics and machinery imports ($206bn) in 2024. A 100-percentage-point increase in tariffs seems certain to show up as higher prices for businesses and consumers. The only question is how much higher. Recession risk remains elevated. China accounts for 7 per cent of US goods exports, or 0.5 per cent of US GDP.

Source: Unhedged Newsletter

3. Government Spending, on Autopilot, Soars Despite DOGE’s $150 Billion Cuts

Federal spending is higher since President Trump took office even as the Department of Government Efficiency slashes contracts, cuts jobs and ends diversity programs. A Wall Street Journal analysis of daily financial statements issued by the Treasury Department found government spending since the inauguration is $154 billion more than in the same period in 2024 during the administration of President Joe Biden. DOGE claims cuts of $150 billion so far, but the Journal analysis found those efforts have yet to affect the bottom line. And while the government’s income—taxes and revenues including tariffs—is also up, it isn’t enough to keep pace with higher spending.

Editors note: to materially reduce the debt, there are 5 levers: interest rates, Social Security, Medicare, defense spending and growth. Reducing Social Security or Medicare benefits, and to some extent defense spending, are political non-starters.
Source: Wall Street Journal

4. House Passes Trump’s Budget Blueprint in Narrow 216-214 Vote

House Republicans narrowly approved the blueprint for President Trump’s “one big, beautiful bill” following a late push by party leaders that won over some holdouts who had worried that the plan doesn’t force deep-enough spending cuts. The 216-214 vote on Thursday marks a major step forward for Trump’s legislative agenda, and it notches a much-needed win for the White House after Trump put some of his tariffs on hold Wednesday. The House’s adoption of the measure unlocks a procedural fast track for a bill later this year that would extend expiring tax cuts, lower taxes even further and increase spending for border security and national defense. Two House Republicans—Thomas Massie of Kentucky and Victoria Spartz of Indiana—joined Democrats in voting against the measure.
Source: Wall Street Journal

5. Battle for Eurasia Update: China Admits to US Cyberattacks, Ukraine Talks Stalled?

Editors note: This ongoing conflict pits the West, led by the United States, against an axis of adversaries, including China, Russia, Iran, and North Korea. At stake is dominance over the vast and strategically critical landmass of Eurasia. The conflicts in Ukraine, the Middle East, and rising tensions with China in East Asia are all interconnected, forming part of a larger struggle: the Battle for Eurasia. To dive deeper into my framework for understanding the Battle for Eurasia, see my article.

A. Chinese officials acknowledged in a secret December meeting that Beijing was behind a widespread series of alarming cyberattacks on U.S. infrastructure, according to people familiar with the matter, underscoring how hostilities between the two superpowers are continuing to escalate. The Chinese delegation linked years of intrusions into computer networks at U.S. ports, water utilities, airports and other targets, to increasing U.S. policy support for Taiwan, the people, who declined to be named, said. The first-of-its-kind signal at a Geneva summit with the outgoing Biden administration startled American officials used to hearing their Chinese counterparts blame the campaign, which security researchers have dubbed Volt Typhoon, on a criminal outfit, or accuse the U.S. of having an overactive imagination.

B. President Trump’s senior aide on Russia negotiations, Steve Witkoff, arrived in Russia on Friday, the Kremlin said, as American and Russian officials are trying to reignite talks over the war in Ukraine that have appeared stalled in recent weeks.
Source: Wall Street Journal, New York Times

April 11, 1803: French Foreign Minister Talleyrand offers to sell Louisiana Territory to U.S.

SUBSCRIBE ONLINE TO GET THE US CITIZEN JOURNAL IN YOUR INBOX - FREE!

See the Ad Astra Podcast! Released on Apple and Spotify around 10a CST.

Sponsors (click me!)

Sources

1. https://www.washingtonpost.com/business/2025/04/10/trump-tariff-rate-china-imports/ (Washington Post)
2. https://www.ft.com/content/706b6281-1077-40b8-ad40-e11ee0f55f92 (Financial Times)
3. Unhedged Newsletter
4. https://www.wsj.com/politics/policy/trump-doge-government-spending-increases-5903992d?mod=hp_lead_pos7 (Wall Street Journal)
5. https://www.wsj.com/politics/policy/house-approves-trump-budget-blueprint-after-winning-over-gop-holdouts-e70a283b?st=dK9EgC&reflink=article_copyURL_share (Wall Street Journal)
6. https://www.wsj.com/politics/national-security/in-secret-meeting-china-acknowledged-role-in-u-s-infrastructure-hacks-c5ab37cb?mod=hp_lead_pos4 (Wall Street Journal)
7. https://www.nytimes.com/2025/04/11/world/europe/ukraine-trump-witkoff-talks.html (New York Times)