China fires back at Trump with 34 per cent tariffs on American goods

Singapore: China has fired back with a 34 per cent tariff on all American goods, matching the Trump administration’s latest salvo in an escalating trade war that has triggered worldwide backlash, savaged stockmarkets and intensified fears of a global recession.

China announced the across-the-board tariffs on Friday evening, effective from April 10, along with a series of other measures, including adding 11 more American companies to a trade blacklist that bans them from investing in China or trading with Chinese companies.

Beijing’s tariffs response signals it has no intention of surrendering to US President Donald Trump’s punitive trade measures.Credit: Bloomberg

The Commerce Ministry in Beijing also said in a notice that it will impose more export controls on rare earths, which are materials used in high-tech products such as computer chips and electric vehicle batteries.

Beijing’s response, its most comprehensive to date in the ratcheting tit-for-tat tariff exchange, signals it has no intention of surrendering to US President Donald Trump’s punitive trade measures.

The much vaunted prospect of a meeting between Trump and Chinese President Xi Jinping, which the US President himself favoured doing within his early months in office, has faded from view as the trade tensions have ramped up.

China’s Foreign Ministry condemned the US tariffs as a “bullying practice” that “endangers global economic development” but kept the door open to future negotiations.

“China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner,” the Chinese Finance Ministry said in a statement.

Trump posted his reaction to his social media platform, TruthSocial: “China played it wrong, they panicked – the one thing they cannot afford to do!”

China’s response comes one day after the US imposed additional 34 per cent sweeping tariffs on Chinese imports, adding to the 20 per cent imposed earlier this year, as part of the US president’s “Liberation Day” rampage that spared no nation, including Australia, which was hit with 10 per cent tariffs on its US-bound imports.

It is the first time that Beijing has retaliated with across-the-board tariffs this year, having until now preferring to target select industries and goods for additional duties in response to Trump’s previous tariff announcements.

“This retaliatory measure is China saying to America that ‘two can play this game’, and the world is still bipolar, that China and the US are equals, and if US want to slap tariffs on China, China will not simply turn the other cheek and take it,” said Wen-ti Sung, a political scientist and fellow at the Atlantic Council.

China’s announcement caused an immediate acceleration of losses in markets worldwide, which have already taken a hammering this week.

The S&P 500 was down 4.8 per cent in afternoon trading, local time, after earlier dropping more than 5 per cent, following its worst day since COVID wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1719 points, or 4.3 per cent, as of 1.08pm Eastern time, and the Nasdaq composite was 4.9 per cent lower.

US Secretary of State Marco Rubio said economies were not crashing, but rather markets were “reacting to a dramatic change in the global order in terms of trade”.

“The markets will adjust,” he said at a press conference on the sidelines of a NATO summit in Brussels.

He accused China of not consuming any goods, and having an export-dominated economy that flooded and distorted markets.

“So the president rightly has concluded that the current status of global trade is bad for America and good for a bunch of other people, and he’s going to reset it, and he’s absolutely right to do it,” Rubio said.

Investment bank JP Morgan said it now sees a 60 per cent chance of the global economy entering recession by year end, up from 40 per cent previously.

with agencies

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