China has announced new tariffs of 84% on the US, in a response to Donald Trump’s trade war that will raise fears of further escalation.
The Chinese ministry of finance said it will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced, Reuters reported. The ministry accused the US of "bullying tactics.'" China raised its tariffs on US goods by 50%, jacking up the 34% announced earlier by 50%, thus taking the total to 54%--against Trump's 104%.
Despite the market chaos, China’s government was unbowed, reiterating threats of further countermeasures and saying it was unwilling to fight a trade war but “will never sit idly by and watch the legitimate rights and interests of the Chinese people be damaged and deprived”.
“When challenged, we will never back down,” said China’s foreign ministry spokesperson. The Chinese commerce ministry said: “China will fight to the end if the US side is bent on going down the wrong path.”
The US and China are heading towards an all-out trade war, after Donald Trump unleashed a fresh wave of tariffs against dozens of partners that triggered a fresh day of stock market turmoil on Wednesday.
Stock markets sold off further in the wake of the announcement. Oil prices are also slumping, as investors price in the risk of a global recession prompted by Trump’s tariffs.
Elsewhere in the world, steeper tariffs on more than 60 countries, including India--which Trump sees as the worst tariff offenders--took effect on Wednesday, rattling global trade and stock markets.
Brent crude oil futures prices fell by more than 4% on Wednesday, dipping below the $60 per barrel mark for the first time since February 2021. That was a decline from $75 at the start of the month.
Falling oil prices are one aspect of the market turmoil that Donald Trump will welcome, as he promised cheaper energy and gasoline for cars. However, it is not clear that he planned to achieve that goal by raising the risk of a global recession.
One of the most helpful factors in Beijing’s favour is the fact that the US is far more dependent on Chinese imports than China is on the US.
The main items that the US imports from China are consumer goods, such as smartphones, computers and toys. The cost of the cheapest iPhone available in the US could rise from $799 to $1,142 – and that was when Trump’s China tariffs were just 54%.
In contrast, the goods that China imports from the US are industrial and manufacturing supplies, such as soya beans, fossil fuels and jet engines. It is much easier for price increases in these commodities to be absorbed before a consumer gets their wallet.
