05:52 AM EDT, 04/11/2025 (MT Newswires) -- China, the world's second-largest economy, said Friday it raised import levies on the US to 125% from 84%, retaliating against President Donald Trump's decision to jack up trade tariffs on the Asian powerhouse this week.

Trump ordered lifting duties on imports from China to 125%, which increases to 145% if the Fentanyl levies imposed earlier in the year are also included. Simultaneously, Trump announced a 90-day pause for reciprocal tariffs that his administration imposed on all the other US trading partners.

China's Customs Tariff Commission of the State Council from China said Friday that additional tariff measures on imported goods originating in the United States will be adjusted from April 12.

"The imposition of abnormally high tariffs on China by the US is a serious violation of international economic and trade rules, as well as basic economic laws and common sense, and is completely unilateral bullying and coercion," the commission said.

US equity futures fell in premarket activity Friday, with the Dow Jones Industrial Average down 265 points, the Nasdaq Composite lower by 145 points, and the S&P 500 slumping 43 points.

The CBOE Volatility Index jumped 7.23% to 43.66 pre-bell, heading back toward all-time highs seen during the COVID-19 pandemic and the global financial crisis.

Gold futures jumped 2% to $3,243.55 intraday.

The US dollar depreciated 1.5% against the Japanese yen to 142.28 early Friday, the lowest since September 2024. The US Dollar Index traded 1.6% lower at 99.28 after touching a 52-week low of 99.01 earlier in the session.

The increase in China tariffs but delay in others leaves the effective tariff rate at 23%, at historical highs, Morgan Stanley economists, including Michael Gapen, said in a note Thursday. "Delays help, but do not reduce uncertainty," Chief US Economist Gapen said.

Morgan Stanley continues to project sluggish growth of 0.6% quarter-over-quarter in Q4 this year, a low unemployment rate, and a "tariff-induced surge" in core personal consumption expenditures, or PCE, inflation to 4% in December. Core PCE is the Fed's preferred measure for gauging price pressures in the economy.

"We maintain our outlook for no Fed rate cuts in 2025 and backloaded cuts in 2026 for a terminal rate of 2.50-2.75%," Gapen said. "A downturn could bring cuts forward."