BEIJING/WASHINGTON/LONDON: Beijing increased its tariffs on US imports to 125% on Friday, hitting back against US President Donald Trump’s decision to hike duties on Chinese goods and raising the stakes in a trade war that threatens to up-end global supply chains.
China’s retaliation intensified the economic turmoil unleashed by Trump’s tariffs, which has seen markets tumbling and foreign leaders puzzling how to respond to the biggest disruption to the world trade order in decades.
US markets opened lower on Friday. The Dow Jones Industrial Average fell 100.2 points at the open, while the S&P 500 fell 12.5 points at the bell.
“Recession risk is much, much higher now than it was a couple weeks ago,” said Adam Hetts, global head of multi-asset at Janus Henderson.
The US administration was sticking to its guns on Friday, touting its discussions with a number of countries on new trade deals which it says will justify its dramatic upheaval in policy. “We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Trump posted on social media on Friday.
However, the tit-for-tat tariff increases by the US and China stand to make goods trade between the world’s two largest economies impossible, analysts say. That commerce was worth more than $650 billion in 2024.
Global stocks fell, the dollar slid and a sell-off in US government bonds picked up pace on Friday, reigniting fears of fragility in the world’s biggest bond market. Gold, a safe haven for investors in times of crisis, scaled a record high.
While announcing a 90-day tariff pause on dozens of countries earlier this week, Trump ratcheted up tariffs on Chinese imports, raising them effectively to 145%.
China hit back with its own new tariffs on Friday, with the finance ministry saying Trump’s new tariffs were “completely unilateral bullying and coercion.”
Beijing indicated that this would be the last time it matched the US, should Trump take his duties any higher. But it left the door open for Beijing to turn to other types of retaliation. “If the US truly wants to have talks, it should stop its capricious and destructive behavior,” Liu Pengyu, spokesperson for the Chinese Embassy in the United States, wrote on social media on Friday. “For the welfare of the Chinese and the people of the world, for the fairness and justice of the global order, China will never bow to maximum pressure of the US”
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