Washington (AFP) – US President Donald Trump on Monday threatened new tariffs of 50 percent on China, ratcheting up a trade war even as a dramatic selloff in global markets gathered pace.
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.
In response to Trump’s tariffs, Beijing – Washington’s major economic rival – unveiled its own 34 percent duties on US goods to come into effect on Thursday.
The US president on Monday chastised China for not heeding “my warning for abusing countries not to retaliate.”
He said on social media that if China did not immediately back down “the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.”
With the incoming 34 percent rate and new 50 percent threat, the total additional tariffs this year could hit 104 percent, the White House told AFP.
Stock markets and oil prices collapsed further, as trading floors across the world were overcome by waves of selling after last week’s sharp losses.
Wall Street was wracked by volatility, bouncing into positive territory on hopes of a 90-day pause in tariffs, only to sink lower when those were dashed by the White House.
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.
“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!”
Trump scrapped any meetings with China over its retaliation, but said the United States was ready to open talks with all countries willing to negotiate.
A 10 percent “*baseline” tariff on US imports from around the world took effect Saturday but a slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.
Chinese vice commerce minister Ling Ji said its tit-for-tat duties “are aimed at bringing the United States back onto the right track of the multilateral trade system.”
“The root cause of the tariff issue lies in the United States,” Ling told representatives of US companies on Sunday.
EU trade ministers gathered in Luxembourg on Monday to discuss the bloc’s response, with Germany and France having advocated 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.
Even at 100% tariff the Chinese products will still be cheaper than American made. And often of higher quality.
American can still afford it. it is a tax paid by Americans anyway, not china.
Higher quality? Not likely. Actually available Id give you. We don’t have the equipment to make a lot of the stuff china can make. If we can make it, its probably on newer machines with better tolerances. This is a sweeping generality of course but so is the contrary claim.
Ive been to manufacturing sites in china, Ive outsourced sub-assemblies. They have a lot of capabilities. The US still (for now) has more sophistication/infrastructure. Given proper controls, Chinese manufacturers can match our quality for cheaper, it is a lot of work though.
China is no longer only the manufacturer of cheap Chinese replicas. It’s really split into two categories now: low quality and high quality. What’s impressive is that in both they manage to mass produce on a very large scale.
Look at their rail equipment, medical equipment, robotics, ship building, marine engineering equipment, agricultural machinery and of course EVs. All high-end products that match or beat the western competition.
It’s those controls that make it expensive.
And what immediately undercuts the original seller. As the “junk” ones still are out there, and the mfg wants to make something off them, so they “oops” them into a counterfeit for half the price.
