Global Trade War Escalates: China Imposes 84% Tariffs on US Goods
China Announces Higher Tariffs on US Goods
China has announced that it will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced. This move is the latest salvo in the ongoing global trade war sparked by US President Donald Trump.
Trump’s "Reciprocal" Tariffs Take Effect
Trump’s "reciprocal" tariffs on dozens of countries took effect earlier on Wednesday, including massive 104% duties on Chinese goods. The European Union is also preparing its own retaliatory measures for later on Wednesday.
Global Trading Order Shaken
Trump’s punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of recession, and wiped trillions of dollars off the market value of major firms.
China Warns of Determination and Means
Earlier in the day, China called its trade surplus with the United States an inevitability and warned it had the "determination and means" to continue the fight if Trump kept hitting Chinese goods.
Currency Pressure
China’s currency has faced heavy downward pressure, with the offshore yuan at record lows due to the tariffs. However, sources told Reuters that the central bank has asked major state-owned banks to reduce US dollar purchases and will not allow sharp yuan declines.
WTO Statement
Meanwhile, China told the World Trade Organization that the United States’ tariffs threatened to further destabilize global trade.
"The situation has dangerously escalated….As one of the affected members, China expresses grave concern and firm opposition to this reckless move," China said in a statement to the WTO on Wednesday, sent to Reuters by the Chinese mission to the WTO.
Market Rout
Since Trump unveiled his tariffs last Wednesday, the S&P 500 has suffered its deepest loss since the benchmark’s creation in the 1950s. It is now nearing a bear market, defined as 20% below its most recent high.
European Union Countermeasures
European Union countries are expected to approve the bloc’s first countermeasures against Trump’s tariffs on Wednesday, joining China and Canada in pushing back. The European Commission has proposed extra duties, mostly of 25%, on a range of US imports from motorcycles, poultry, fruit, wood, and clothing to dental floss, according to a document seen by Reuters. These duties are to enter into force in stages.
Conclusion
The global trade war continues to escalate, with no end in sight. The impact on global markets and economies is significant, and it remains to be seen how this situation will unfold.
FAQs
Q: What are the tariffs imposed by China on US goods?
A: China will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced.
Q: What are Trump’s "reciprocal" tariffs?
A: Trump’s "reciprocal" tariffs are tariffs imposed on dozens of countries, including China, in response to their own tariffs.
Q: What is the impact of the global trade war on global markets?
A: The global trade war has caused significant losses in global markets, with the S&P 500 nearing a bear market.
Q: What is the European Union’s response to Trump’s tariffs?
A: The European Union is preparing its own retaliatory measures against Trump’s tariffs, including extra duties on US imports.