(AFP) – US President Donald Trump on Tuesday forged ahead with tariffs of over 100 percent against Chinese goods after Beijing refused to withdraw its retaliation as the world’s biggest economies go head-to-head in a ruinous trade war that has rocked global markets. Trump’s sweeping 10 percent tariffs have rocked the global economy since coming into force over the weekend, triggering a dramatic market sell-off worldwide and sparking recession fears. Rates on imports to the United States from dozens of economies will rise further at 12.01 am (0401 GMT) Wednesday.
China — Washington’s top economic rival but also a major trading partner — will be hardest hit, with tariffs imposed on its products since Trump returned to the White House reaching a staggering 104 percent. Beijing has vowed to fight a trade war “to the end” against Trump, who remained defiant despite major US indexes tumbling again Tuesday. The US president believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States. But many business experts and economists question how quickly — if ever — this can take place, warning of higher inflation as the tariffs raise prices.
Trump said Tuesday the United States was “taking in almost $2 billion a day” from tariffs. He originally unveiled a 34 percent additional tariff on Chinese goods. But after China countered with its own 34 percent tariff on American products, he vowed to pile on another 50 percent duty, signing the executive order for the higher fee on Tuesday. Counting existing levies imposed in February and March, that would take the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104 percent. Trump insisted the ball was in China’s court, saying Beijing “wants to make a deal, badly, but they don’t know how to get it started.”
Late Tuesday, Trump also said the United States would announce a major tariff on pharmaceuticals “very shortly.” He also signed an order allowing significantly higher duties on low-value Chinese imports to take effect starting early next month. And he told a dinner with fellow Republicans that countries were “dying” to make a deal. “I’m telling you, these countries are calling us up kissing my ass,” he said.
Separately, Canada said that its tariffs on certain US auto imports will come into force Wednesday.
After trillions in equity value were wiped off global bourses in the last days, markets in Asia opened down again on Wednesday, with Hong Kong plunging more than three percent and Japan’s Nikkei sinking 2.7 percent. The foreign exchange markets also witnessed ructions, with the South Korean won falling to its lowest level against the dollar since 2009 on Tuesday. China’s offshore yuan also fell to an all-time low against the US dollar, as Beijing’s central bank moved to weaken the yuan on Wednesday for what Bloomberg said was the fifth day in a row. Oil prices slumped, with the West Texas Intermediate closing below $60 for the first time since April 2021.
China also condemned remarks by US Vice President JD Vance in which he said the United States had for too long borrowed money from “Chinese peasants.” The European Union sought to cool tensions, with the bloc’s chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese Premier Li Qiang. She stressed stability for the world’s economy, alongside “the need to avoid further escalation,” said an EU readout. The Chinese premier told von der Leyen that his country could weather the storm, saying it “is fully confident of maintaining sustained and healthy economic development.” The EU — which Trump has criticized bitterly over its tariff regime — may unveil its response next week to new 20 percent levies it faces. French President Emmanuel Macron called on Trump to reconsider, adding if the EU was forced to respond: “so be it.” In retaliation against US steel and aluminum levies that took effect last month, the EU plans tariffs of up to 25 percent on American goods ranging from soybeans to motorcycles, according to a document seen by AFP.
Trump said Tuesday his government was working on “tailored deals” with trading partners, with the White House saying it would prioritize allies like Japan and South Korea. His top trade official Jamieson Greer told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs. Wall Street’s major indices closed lower Tuesday, with the broad-based S&P 500 falling 1.6 percent. In one public sign of friction over tariffs, key Trump ally Elon Musk described senior White House trade advisor Peter Navarro as “dumber than a sack of bricks.” Musk, who has signaled his opposition to Trump’s trade policy, hit out after Navarro described his Tesla company as “a car assembler” that wants cheap foreign parts.
burs-oho/hmn – Ben Sheppard and Beiyi Seow with Sam Davies in Beijing
© 2024 AFP
