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Tariff battle escalates as China retaliates with 125% tariffs on US goods
Beijing’s retaliation sparked fresh market volatility, with European stocks seesawing following the announcement while Tokyo and Seoul closed in the red, AFP reported.
In a sign of investors’ worries about the health of the US economy under President Donald Trump’s erratic stewardship, the dollar fell to a three-year low against the euro and by 1.3 percent against the yen.
In Beijing, China’s State Council Tariff Commission said new tariffs of 125 percent on US goods would take effect Saturday, almost matching the staggering 145 percent level imposed on Chinese goods coming into America.
A Commerce Ministry spokesperson said the United States bore “full responsibility for this”, deriding Trump’s tariffs as a “numbers game” that “will become a joke”.
The Chinese finance ministry said tariffs would not go any higher because “there is no possibility of market acceptance for US goods exported to China” – an acknowledgment that almost no imports are possible at the new level.
Beijing also said it would file a lawsuit with the World Trade Organization over the latest round of levies announced by Trump.
Chinese President Xi Jinping condemned “unilateral bullying”.
While the superpowers clash, the EU said its trade chief Maros Sefcovic would hold talks with US counterparts in Washington on Monday to resolve their own tariffs spat.
Sefcovic is traveling “in good faith to try and find solutions that can benefit us all,” EU trade spokesperson Olof Gill said.
Trump sent global financial markets into a tailspin by announcing historic tariffs on America’s trading partners on April 2, including a 10-percent baseline for all goods coming into the United States.
After days of plunging markets, on Wednesday he froze the higher tariff rates of 20 percent or more imposed on allies such as the European Union or Japan, but kept an additional rate of 34 percent on China.
Beijing has since retaliated, leading to tit-for-tat increases over the past few days that culminated in Friday’s latest move.
Trump acknowledged “a transition cost and transition problems” on Thursday, while insisting “in the end it’s going to be a beautiful thing.”
Speaking to reporters, he said he had respect for Xi and was hoping for a deal.
“He’s been a friend of mine for a long period of time. I think that we’ll end up working out something that’s very good for both countries,” he said.
Economists warn that the disruption in trade between the tightly integrated US and Chinese economies threatens businesses, will increase prices for consumers, and could cause a global recession.
Trump described the European Union as “very smart” to refrain from retaliatory levies.
But the 27-nation bloc’s chief Ursula von der Leyen told the Financial Times on Friday that it remained armed with a “wide range of countermeasures” if negotiations with Trump hit the skids.