China has announced an 84% retaliatory tariff on US imports, escalating the trade war between the two global economic powerhouses.
This move comes in response to President Donald Trump’s 104% tariff on Chinese goods, which took effect today.
China’s tariff on US imports will now rise from 34% to 84%, effective Thursday.
Market Reaction
US stock index futures plummeted on Wednesday, with Dow E-minis down 1.87%, S&P 500 E-minis down 1.72%, and Nasdaq 100 E-minis down 1.45%.
The tit-for-tat exchange is part of an ongoing trade dispute between the US and China, with both countries imposing tariffs on each other’s goods.
China’s scathing critique
The Chinese government has expressed its disapproval of the US move, calling it a “mistake upon mistake” that severely infringes on China’s legitimate rights and interests.
According to China’s State Council Tariff Commission, the US escalation of tariffs is a serious threat to the multilateral trading system based on rules.
“The US escalation of tariffs on China is a mistake upon mistake, severely infringing upon China’s legitimate rights and interests, and seriously damaging the multilateral trading system based on rules,” the Commission stated.
US justification and China’s response
The US government has justified its aggressive trade measures by accusing China of employing non-market policies that grant it “global dominance in key manufacturing industries” and “decimating US industry.”
- However, China has vehemently denied these allegations, vowing to take decisive countermeasures to protect its national interests.
- In response to the US tariffs, China had imposed its own retaliatory measures, including a 34% tariff on US imports on Tuesday.
The Chinese Commerce Ministry has criticized the US for “unilateral bullying” and “blackmail,” emphasizing that China’s countermeasures are legitimate actions aimed at safeguarding its sovereignty, security, and developmental interests.
What you should know
- The escalating trade tensions between the US and China have significant implications for the global economy.
- The tit-for-tat exchange of tariffs has already led to mixed reactions globally, with some nations seeking to negotiate better trade terms with the US.
- As the trade war continues to intensify, it remains to be seen how the global community will respond.
One thing is certain, however, the US-China trade war is having far-reaching consequences for international trade and the global economy.
