China Announces 34% Retaliatory Tariffs on US Imports.
China has announced duties of 34 per cent on all US imports in retaliation to Donald Trump’s tariffs, moving the world closer to a full-blown trade war as the US president vowed he would never back down. Global stock markets extended their losses on Friday after Beijing’s statement, with the S&P 500 down 3.8 per cent and the Europe-wide Stoxx 600 5.1 per cent lower. Oil prices tumbled on fears of a global economic slowdown, with Brent crude down 7.4 per cent at $64.96 a barrel. “CHINA PLAYED IT WRONG, THEY PANICKED — THE ONE THING THEY CANNOT AFFORD TO DO!” Trump posted on his Truth Social network just before Wall Street began trading for the day.
The new Chinese tariff matches the US president’s latest increase in duties on Beijing and comes on top of a previous tit-for-tat round this year. The country’s Ministry of Commerce said on Friday that it would be imposed on all US imported goods from April 10, a day after America’s “reciprocal” levies come into effect. Beijing’s move was accompanied by a slew of other measures, including restrictions on rare earth exports and a probe of the China subsidiary of DuPont, the US chemicals giant. Trump said he would persist with his policy, which will take Washington’s tariffs to their highest for more than a century, despite the falls on Wall Street and other stock exchanges around the world.
“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he posted. “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!” The US president’s announcement this week of the 34 per cent tariff on Chinese imports to the US will take average US tariffs on Chinese goods to 76 per cent, according to analysis by the Peterson Institute of International Economics. That figure is well above the 60 per cent Trump threatened during last year’s election campaign. Beijing, which had previously considered such a level of tariffs as a worst-case scenario, denounced the new US duties as “a typical unilateral bullying move”. It added that this week’s round of US tariffs “does not comply with the rules of international trade and seriously damages the legitimate rights and interest of China”. Leah Fahy, a China economist at Capital Economics, said in a research note that Beijing’s new 34 per cent retaliatory duty pushed the country’s average tariff on US imports up to about 50 per cent, and marked a “significant escalation”.
The latest measures are likely to have the most impact on US agricultural exports, including soyabeans, wheat and corn. China is also a significant importer of pharmaceuticals, crude oil, petroleum gas and liquefied natural gas from the US. The trade war comes at a sensitive moment for Chinese President Xi Jinping, who has leaned on exports to steer the world’s second-largest economy through a property sector slump and deflation. Alicia García-Herrero, chief economist for Asia-Pacific at Natixis, said Beijing’s latest round of tariffs suggested it was trying to position itself to be first in line for high-level negotiations with Washington. Trump’s move to impose steep tariffs on US trading partners around the world has convulsed markets. On Thursday, about $2.5tn in market value was erased from Wall Street stocks and all of the dollar’s post-election gains were wiped out. As the falls continued on Friday, the FTSE 100 slumped 4.6 per cent and Germany’s Dax lost 4.9 per cent.
Financial Times
