Global Trade War Escalates: US Calls China’s Retaliation a "Big Mistake"
Washington and Beijing Engage in Tariff War
The United States called China’s retaliation against its tariffs a "big mistake" on Tuesday, as a global trade war ignited by President Donald Trump’s sweeping levies showed few signs of abating, even as global markets steadied after days of carnage.
China Refuses to Back Down
China refused to bow to what it called "blackmail" after Trump threatened to ratchet up tariffs on U.S. imports from the world’s No. 2 economy to more than 100% in response to China’s decision to match "reciprocal" duties Trump announced last week.
EU and Other Asian Countries Take a More Measured Approach
China’s fast and hardline approach contrasted with more emollient moves by other Asian countries. The European Union is also still consulting with member states on how hard to punch back against Trump’s tariffs without causing more harm to its consumers and exporters.
U.S. Treasury Secretary Blasts Beijing
U.S. Treasury Secretary Scott Bessent blasted Beijing in an interview with CNBC, stressing that any U.S. negotiations with other countries on tariffs were the result of them knocking on Washington’s door and not due to global market turmoil.
China Vows to "Fight to the End"
China on Tuesday vowed to "fight to the end".
European Commission President Calls for Negotiated Solution
European Commission President Ursula von der Leyen in a phone call with China’s Premier Li Qiang called on Beijing to ensure a negotiated solution and stressed the need to support a fair trading system founded on a level playing field.
Global Markets Steady After Days of Carnage
Stock markets found a firmer footing on Tuesday after a gut-wrenching few days for investors, which prompted some business leaders, including those close to Trump, to urge the president to reverse course.
European Shares Bounce Back
European shares bounced off 14-month lows after four straight sessions of heavy selling, while global oil prices steadied after falling to four-year lows.
U.S. Stock Index Futures Edge Higher
U.S. stock index futures edged higher after suffering trillions of dollars in losses since last week.
Trump’s Tariffs Aim to Recapture Industrial Base
Trump said the tariffs – a minimum of 10% for all U.S. imports, with targeted rates of up to 50% – would help the United States recapture an industrial base he says has withered over decades of trade liberalisation.
Europe Eyes Counter-Measures
The European Commission is mulling counter-tariffs of 25% on a range of U.S. goods including soybeans, nuts and sausages, though other potential items like bourbon whiskey were left off the list, a document seen by Reuters showed. Officials said they stood ready to negotiate a "zero for zero" deal with Trump’s administration and said all instruments were on the table to avoid a tariff war.
Conclusion
The global trade war between the United States and China shows no signs of abating, with both sides refusing to back down. The European Union and other Asian countries are taking a more measured approach, consulting with member states and considering counter-measures. As financial market sentiment remains fragile, it remains to be seen how this trade war will play out and what its impact will be on global economies.
FAQs
- What is the reason behind the global trade war between the United States and China?
- The trade war was sparked by President Donald Trump’s decision to impose tariffs on Chinese goods, which China retaliated against by imposing tariffs on US goods.
- What are the effects of the trade war on global markets?
- The trade war has caused significant volatility in global markets, with stock prices falling and investors becoming increasingly cautious.
- What is the European Union’s stance on the trade war?
- The European Union is taking a more measured approach, consulting with member states and considering counter-measures, while also urging a negotiated solution.