China will impose 84 per cent tariffs on US goods from Thursday, up from the 34pc previously announced, its finance ministry said on Wednesday, firing the latest salvo in a global trade war sparked by US President Donald Trump.
Trump’s “reciprocal” tariffs on dozens of countries took effect earlier today, including massive 104pc duties on Chinese goods. The European Union is also preparing its own retaliatory measures for later today.
Trump’s punishing tariffs – which he says aim to end US trade deficits with many countries — have upended a global trading order in place for decades, raising fears of recession and wiping trillions of dollars off the market value of major firms.
Global markets took a pummelling today as Trump’s eye-watering 104pc tariffs on China came into effect, and a savage selloff in US bonds sparked fears that foreign funds were fleeing US assets.
US Treasury Secretary Scott Bessent, in an interview with Fox Business Network, said China’s new tariffs were unfortunate.
“They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them,” he said.
This week has already brought crisis-era volatility to markets, wiping trillions of dollars off the value of stocks and hammering commodities and emerging markets.
Shares of big US banks fell pre-market, extending tariffs-induced losses after China announced its 84pc tariffs on US goods. Oil prices extended their four-year lows.
“The US and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down,” said Ting Lu, chief China economist at Nomura.
Trump had nearly doubled duties on Chinese imports, which had been set at 54pc last week, in response to previous counter-tariffs from Beijing.
The White House had no immediate comment on China’s latest retaliatory move.
Earlier today, China called its trade surplus with the US an inevitability and warned it had the “determination and means” to continue the fight if Trump kept hitting Chinese goods.
China’s currency has faced heavy downward pressure, with the offshore yuan at record lows due to the tariffs. But sources told Reuters that the central bank has asked major state-owned banks to reduce US dollar purchases and would not allow sharp yuan declines.
Meanwhile, China told the World Trade Organisation (WTO) that the US tariffs threatened to further destabilise global trade.
“The situation has dangerously escalated. … As one of the affected members, China expresses grave concern and firm opposition to this reckless move,” China said in a statement to the Geneva-based WTO today that was sent to Reuters by the Chinese mission to the WTO.
Read More: China censures Trump tariff ‘blackmail’ as market turmoil eases
Trump urges firms to move to US ‘now’ to avoid tariffs
Trump urged companies on Wednesday to immediately begin relocating to the United States to avoid tariffs, hours after his trade war escalated with steep duties going into effect.
“This is a great time to move your company into the United States of America, like Apple, and so many others, in record numbers, are doing,” Trump posted on his Truth Social platform, promising “zero tariffs” and “no environmental delays”.
“Don’t wait, do it now!” he urged.
