When will the trade war between the United States and China finally cool down? The answer seems further away than ever as both countries continue their intense tariff battle that has reached historic levels.
The situation escalated dramatically in 2025 when US tariffs on Chinese goods skyrocketed to an average of 126.5% in early May. Think of it like this: if a Chinese toy normally cost $10, Americans suddenly had to pay over $22 for the same item. China didn’t sit quietly and responded with its own punishment, raising tariffs in three separate waves until they covered all US products.
That $10 toy suddenly costing $22 perfectly captures how these massive tariff increases hit American families where it hurts most.
The most dramatic moment came on April 2, 2025, when the US declared “Liberation Day” tariffs. These included a special 20% tax on goods related to fentanyl and a whopping 34% tariff on Chinese products that eventually climbed to 125%. China fired back immediately, matching the 125% rate on all American exports by April 12.
Both sides seemed to realize they had gone too far. On May 12, 2025, they agreed to lower their reciprocal tariffs from 125% to 10% for 90 days, like calling a temporary timeout in a heated game. However, the 20% fentanyl tariff stayed in place. On October 30, 2025, the US reduced fentanyl tariffs from 20% to 10% and extended retaliatory tariffs for another year following discussions on drug control.
Currently, US tariffs on Chinese imports average 51.1% while China’s tariffs on US goods sit at 32.6%. Both countries now tax 100% of each other’s products. The US average tariff rate on all imports hit 18.0% in 2025, the highest since 1934 when the world was dealing with the Great Depression.
American families are feeling the pinch. The typical household faces about $1,500 in extra costs annually due to these tariffs. Items like metals, leather goods, and clothing saw price jumps between 28% and 40% initially. The government expects to collect $3.3 trillion from these tariffs over the next decade, but that money comes directly from American consumers’ wallets through higher prices at stores. Businesses are increasingly moving their supply chains away from China toward alternative trade partners to avoid the escalating costs. Companies implementing B2B integration could better manage these trade disruptions through improved visibility and automated processes across their international operations.
