Beijing (AFP) – China vowed on Tuesday to “fight to the end” against fresh tariffs of 50 percent threatened by US President Donald Trump, further aggravating a trade war that has already wiped trillions off global markets. Trump has upended the world economy with sweeping tariffs that have raised the spectre of an international recession, but has ruled out any pause in his aggressive trade policy despite a dramatic market sell-off.
Beijing — Washington’s major economic rival but also a key trading partner — responded by announcing its own 34 percent duties on US goods to come into effect on Thursday, deepening a showdown between the world’s two largest economies. The swift retaliation from China sparked a fresh warning from Trump that he would impose additional levies if Beijing refused to stop pushing back against his barrage of tariffs — a move that would drive the overall levies on Chinese goods to 104 percent.
“I have great respect for China but they cannot do this,” Trump said in the White House. “We are going to have one shot at this…I’ll tell you what, it is an honour to do it.” China swiftly hit back, blasting what it called “blackmailing” by the US and saying it would “never accept” those tariffs. “If the US insists on going its own way, China will fight it to the end,” a spokesperson for Beijing’s commerce ministry said on Tuesday. “If the US escalates its tariff measures, China will resolutely take countermeasures to safeguard its own rights and interests,” the ministry said.
But Beijing also reiterated that it sought “dialogue” with Washington — and its view that there were “no winners in a trade war”.
– Market turmoil –
Trump’s tariffs have rocked global markets. Hong Kong’s Hang Seng collapsed by 13.2 percent on Monday — its worst day since the Asian financial crisis — before paring back some of those losses in opening trade on Tuesday. Wall Street stocks finished lower following a volatile session, with both the Dow and S&P 500 ending down. Stocks in Thailand, Indonesia and Vietnam — a key export hub — also sank on opening on Tuesday. And in financial powerhouse Singapore, Prime Minister Lawrence Wong told parliament his government was “very disappointed by the US move”. “These are not actions one does to a friend.”
Trillions of dollars have been wiped off combined stock market valuations in recent sessions. Trump doubled down Monday, saying he was “not looking” at any pause in tariff implementation. He also scrapped any meetings with China over tariffs, but said the United States was ready for talks with any country willing to negotiate.
After equities took a hammering in Shanghai, China’s central bank issued a statement before trading resumed Tuesday to underline it was standing behind a sovereign fund as it buys up exchange-traded funds to stabilize the market. With investors seeking any relief from the ruinous trade war, stocks in Tokyo leapt Tuesday after Treasury Secretary Scott Bessent suggested in an interview with Fox News that Japan would get “priority” in negotiations over the US tariffs “just because they came forward very quickly”.
A 10 percent “baseline” tariff on US imports from around the world took effect Saturday, and a slew of countries will be hit by higher duties from Wednesday, including the levy of 34 percent for Chinese goods as well as 20 percent for EU products. Scores of countries have sought talks, Bessent said, adding “through good negotiations, all we will do is see levels come down”.
While meeting Israel’s Prime Minister Benjamin Netanyahu, the first leader to lobby Trump in person over the levies, Trump said: “There can be permanent tariffs, and there can also be negotiations, because there are things that we need beyond tariffs.” EU trade ministers were in Luxembourg 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.
– Inflation? Recession? –
While markets continued their wild ride, Trump told Americans: “Don’t be Weak! Don’t be Stupid!”. The 78-year-old Republican believes the tariffs will revive America’s lost manufacturing base by forcing foreign companies to relocate to the United States, rather than making goods abroad. But most economists question that and say his tariffs are arbitrary.
JPMorgan Chase CEO Jamie Dimon warned of coming inflation, adding “whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth”. US Senator Ted Cruz — a staunch Trump loyalist — expressed widespread concern among Republican lawmakers over the impact on ordinary voters. He warned of a jobs crunch and rising prices, saying a recession would mean a “bloodbath” for Republicans in mid-term elections next year.
© 2024 AFP
