Washington (AFP) – US President Donald Trump on Monday threatened fresh tariffs of 50 percent on China and ruled out any pause in his aggressive new global trade policy, despite a dramatic market sell-off. Trump upended the world economy last week with sweeping tariffs that have raised fears of an international recession and triggered criticism even from within his own Republican Party.
As the trade war escalates, Beijing — Washington’s major economic rival — unveiled its own 34 percent duties on US goods to come into effect on Thursday. The US president responded by chastising China for ignoring his warning that targeted countries should not retaliate. He said that if Beijing did not immediately back down, the United States would impose additional 50 percent tariffs on China from Friday. “I have great respect for China but they cannot do this,” Trump said in the White House. “We are going to have one shot at this…I’ll tell you what, it is an honor to do it.” With the incoming 34 percent rate and new 50 percent threat, the total extra tariffs on China this year could rise to 104 percent, the White House told AFP.
Beijing hit back, saying in a statement from its US embassy that “pressuring or threatening China is not the right way to engage.” Stock markets and oil prices collapsed further, as trading floors across the world endured waves of selling after last week’s sharp losses. Wall Street stocks finished lower following a volatile session, with both the Dow and S&P 500 ending down. But Hong Kong collapsed by 13.2 percent Monday, its worst day in nearly three decades. Trillions of dollars have been wiped off combined stock market valuations in recent sessions. Tokyo closed down by almost eight percent. Frankfurt fell as much as 10 percent in early trading before paring back losses.
Trump doubled down again on Monday, saying he was “not looking” at any pause in tariff implementation. He also scrapped any meetings with China over tariffs but said the United States was ready for talks with any country willing to negotiate. “There can be permanent tariffs, and there can also be negotiations, because there are things that we need beyond tariffs,” Trump said while meeting Israeli Prime Minister Benjamin Netanyahu, the first leader to lobby him in person over the levies. A 10 percent “baseline” tariff on US imports from around the world took effect Saturday, and a slew of countries will be hit by higher duties from Wednesday, including the levy of 34 percent for Chinese goods as well as 20 percent for EU products.
EU trade ministers were in Luxembourg on Monday to discuss the bloc’s response, with Germany and France advocating a tax targeting US tech giants. “We must not exclude any option on goods, on services,” said French Trade Minister Laurent Saint-Martin. The 27-nation bloc should “open the European toolbox, which is very comprehensive and can also be extremely aggressive,” he said. But signs of divergence emerged from Ireland, whose low corporate tax rate has attracted US tech and pharmaceutical companies. Targeting services “would be an extraordinary escalation,” said Irish Trade Minister Simon Harris.
Bitcoin tumbled, while the dollar rebounded after sharp losses last week. “Don’t be weak! Don’t be stupid!” Trump urged Americans minutes before Wall Street opened. “Be strong, courageous, and patient, and GREATNESS will be the result!” The 78-year-old Republican believes that the tariffs will revive America’s lost manufacturing base by forcing foreign companies to relocate to the United States, rather than making goods abroad. But most economists question his theory and say his tariffs are arbitrary.
JPMorgan Chase CEO Jamie Dimon warned of coming inflation, adding, “whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.” US Senator Ted Cruz — a staunch Trump loyalist — expressed widespread concern among Republican lawmakers over the impact on ordinary voters. He warned of a jobs crunch and rising prices, saying a recession would mean a “bloodbath” for Republicans in mid-term elections next year.
© 2024 AFP
