Retaliatory tariffs may only be the beginning of Beijing’s counterattack, although one possibility would be devastating for the United States and China.
President Xi Jinping is on the offensive. China’s surprise announcement of 34 per cent retaliatory tariffs on US goods triggered a fresh wave of sharemarket falls this week.
“Beijing saw the way things are going and thought this might well be the opportune moment to apply more critical pressure on the US,” says Duncan Wrigley, chief China economist at Pantheon Macroeconomics.
