China and US are at each other's throats on tariffs, and neither is backing down
American companies looking to sell into the huge Chinese market have just taken a big hit. A 34% price increase on all US goods entering the country will knock some out of here altogether.
This is especially bad for US agricultural producers. They already had 10 or 15% tariffs on their produce entering China, in response to the last round of Trump tariffs. Now, if you add 34% on top of that, it is probably pricing most of them out.
Beijing doesn't seem too worried about looking elsewhere for more chicken, pork and sorghum and – at the same time – it knows it is whacking the US president right in his heartland.
Globally, all of this has analysts worried.
The problem is that supply chains have become so international, components in any given product could be sourced from all corners of the planet.
So, when the ripples of economic distress start spreading from country to country, it could have potentially catastrophic consequences for all trade.
Live updates: Markets and reaction to Trump tariffs
Full list: See all Trump tariffs by country
Watch: Why Trump's tariffs aren't really reciprocal
Most concerning is that the world's two greatest economies are now at each other's throats with no indication that either is preparing to backdown.
Just take the timing of Beijing's announcement.
The Chinese government revealed its promised "resolute countermeasures" to Trump's latest tariffs in a written statement from the finance ministry at 18:00 local time (10:00 GMT), on a Friday night, which is also a public holiday.
The timing could mean several things.
1. It wanted to somewhat bury the news at home, so as to not spook people too much.
2. It simply made the announcement as soon as its own calibrations had been finalised.
3. Beijing had given up on the hope of using the small window it had before Trump's 54% tariffs on Chinese goods took effect next week to do a deal. So, the government just decided to let it rip.
If it is the last of these reasons, that is pretty bleak news for the global economy because it could mean that a settlement between the world's superpowers could be harder to reach than many had expected.
Another indicator of President Xi's attitude towards President Trump's tariffs can be seen by what he was doing when they were announced.
Elsewhere, governments may have been glued to the television, hoping to avoid the worst from Washington.
Not here.
Xi and the six other members of the Politburo Standing Committee were out planting trees to draw attention to the need to counter deforestation.
It presented a kind of calmness in the face of Trump, giving off a vibe along the lines of: do your best Washington, this is China and we're not interested in your nonsense.
There is still room for the US and China to cut some sort of deal, but the rhetoric does not seem to be heading that way.
Another possible path is for China to increase its trade with other countries – including western nations once seen as close allies of the US – and for these new routes to essentially cut America out of the loop.
Again, this would hurt not only US companies but also US consumers who will already be paying higher prices thanks to Trump's tariffs.
What are tariffs and why is Trump using them?
Are Trump's Asia tariffs a 'full-frontal assault' on China?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Upturn
4 minutes ago
- Business Upturn
I regret some of my posts about President Trump: Elon Musk expresses regret
By Aditya Bhagchandani Published on June 11, 2025, 12:44 IST In what appears to be a shift in tone, Elon Musk on Tuesday posted that he regrets some of his recent remarks about President Donald Trump, saying, 'They went too far.' I regret some of my posts about President @realDonaldTrump last week. They went too far. — Elon Musk (@elonmusk) June 11, 2025 This comes just days after Trump addressed their ongoing feud, stating he wished Musk 'very well' and suggesting the tech mogul might be seeking a conversation. In a gesture that caught attention, Musk had responded with a heart emoji on X (formerly Twitter), sparking speculation about a possible reconciliation. Tensions between the two escalated last week after Musk called Trump's proposed 'One Big Beautiful Bill Act' a 'pork-filled abomination' and accused the President of suppressing Jeffrey Epstein-related files. The latter post, which Musk later deleted, reportedly infuriated Trump, who retaliated with harsh criticism and even threatened to sever government contracts with Musk-led firms. The feud intensified when Musk countered by threatening to halt NASA-linked SpaceX missions and claimed Trump would have lost the 2024 election without his support. He also floated the possibility of impeachment. However, Musk's latest message—posted at 12:34 PM on June 11—marks a notable departure from his confrontational stance, possibly signaling the beginning of a de-escalation. While no official conversation has been confirmed, both camps appear to be softening their positions, leaving the door open for future dialogue. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Newsweek
5 minutes ago
- Newsweek
China Releases Photos of Aircraft Carriers Beyond First Island Chain
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. China released photos showing its aircraft carriers conducting "training exercises" in the western Pacific beyond the first island chain, which is intended to keep its navy in check. "The training complies with relevant international law and practice, and is not targeted at specific countries or entity," a Chinese navy spokesperson said in a statement on Tuesday. Why It Matters The first island chain—comprising Japan, Taiwan and the Philippines—is one of three Pacific island defense lines established by the United States, utilizing its own territories as well as those of its allies and partners, with the goal of restricting China's naval activities. The Chinese navy, the largest in the world by hull count, deployed its aircraft carriers—CNS Liaoning and CNS Shandong—to the eastern side of the first island chain simultaneously for the first time over the weekend, challenging the U.S.'s naval dominance in the region. Meanwhile, the Liaoning became China's first aircraft carrier to be spotted operating in waters east of the second island chain, which stretches from Japan to New Guinea—north of Australia—via Guam, the westernmost U.S. territory that serves as a military hub. What To Know Senior Captain Wang Xuemeng, a spokesperson for the Chinese navy, confirmed in the statement that both the Liaoning and the Shandong had been deployed to the western Pacific Ocean in recent days to test their capabilities in "far-sea defense and joint operations." The spokesperson said the dual aircraft carrier deployment was a "routine arrangement included in the annual training plan," which sought to improve the ability of the Chinese navy—officially known as the People's Liberation Army Navy—to fulfill its missions. Chinese aircraft carriers CNS Liaoning, top, and CNS Shandong, bottom, conducting flight operations with J-15 fighter jets in the western Pacific Ocean in early June. Chinese aircraft carriers CNS Liaoning, top, and CNS Shandong, bottom, conducting flight operations with J-15 fighter jets in the western Pacific Ocean in early June. Chinese military Official photos show both Chinese aircraft carriers launching J-15 fighter jets at an undisclosed location in the western Pacific Ocean during both day and night. A supply ship attached to one of the aircraft carriers was seen providing supplies to a destroyer. However, it remains unclear whether the Liaoning and the Shandong were operating in the same vicinity. They were last tracked underway on the eastern and western sides of the second island chain, respectively, according to a map published by Newsweek. Japan, a U.S. ally that tracks and monitors the Chinese navy, has made a "proper request" to China through diplomatic channels regarding the activities of the Chinese aircraft carriers, Japanese Defense Minister Gen Nakatani said at a news conference on Tuesday. The Chinese supply ship CNS Hulunhu providing supplies to the destroyer CNS Wuxi in the western Pacific Ocean in early June. The Chinese supply ship CNS Hulunhu providing supplies to the destroyer CNS Wuxi in the western Pacific Ocean in early June. Chinese military "China intends to improve the operational capability of its two aircraft carriers and its ability to conduct operations in distant seas and airspace," the minister said, adding that Japan had both the will and the ability to deter unilateral attempts to change the status quo by force. What People Are Saying Lin Jian, a spokesperson for the Chinese Foreign Ministry, said on Tuesday: "Let me reiterate that Chinese naval vessels' activities in those waters are fully consistent with international law and international practices. Our national defense policy is defensive in nature. We hope Japan will view those activities objectively and rationally." Japanese Defense Minister Gen Nakatani said on Tuesday: "In any case, the Ministry of Defense and the Self-Defense Forces will continue to closely monitor the movements of the Chinese Navy vessels, including these two aircraft carriers, and will take all possible measures to conduct surveillance activities." What Happens Next China's dual aircraft carrier deployment comes as two U.S. aircraft carriers—USS Nimitz and USS George Washington—are underway in separate areas of the western Pacific Ocean.
7 minutes ago
Trump's actions in Los Angeles spur debate over deportation funds in his 'big, beautiful' bill
WASHINGTON -- President Donald Trump's 'big, beautiful bill' in Congress includes more than tax breaks and spending cuts — it also seeks to pour billions of dollars into the administration's mass deportation agenda. Republican leaders capitalized Tuesday on the demonstrations in Los Angeles, where people are protesting Trump's immigration raids at Home Depot and other places, to make the case for swift passage of their sprawling 1,000-plus-page bill over staunch Democratic opposition. House Speaker Mike Johnson said the One Big Beautiful Bill Act delivers 'much-needed reinforcements,' including 10,000 new Immigration and Customs Enforcement agents, $45 billion to expand migrant detention facilities and billions more to carry out at least 1 million deportations a year. 'All you have to do is look at what's happening in Los Angeles to realize that our law enforcement needs all the support that we can possibly give them,' said Senate Majority Leader John Thune, R-S.D. The focus on some $350 billion in national security funding comes as action on the massive package is lumbering along in Congress at a critical moment. Trump wants the bill on his desk by the Fourth of July. But Senate Republicans trying to heave it to passage without Democrats are also running up against objections from within their GOP ranks over the details. At the same time, Democrats are warning that Trump's executive reach into California — sending in the National Guard over the governor's objections and calling up the Marines — is inflaming tensions in what had been isolated protests in pockets of LA. They warned the president's heavy-handed approach has the potential to spread, if unchecked, to other communities nationwide. 'We are at a dangerous inflection point in our country,' said Rep. Jimmy Gomez, who represents the Los Angeles area. 'Trump created this political distraction to divide us and keep our focus away from his policies that are wreaking havoc on our economy and hurting working families," he said. "It's a deliberate attempt by Trump to incite unrest, test the limits of executive power and distract from the lawlessness of his administration.' At its core, the bill extends some $4.5 trillion in existing tax breaks that would otherwise expire at the end of the year without action in Congress, cutting some $1.4 trillion in spending over the decade to help offset costs. The Congressional Budget Office found the bill's changes to Medicaid and other programs would leave an estimated 10.9 million more people without health insurance and at least 3 million each month without food stamps from the Supplemental Nutrition Assistance Program. At the same time, CBO said the package will add some $2.4 trillion to deficits over the decade. One emerging area of concern for Republican leaders has been the bill's status before the Senate parliamentarian's office, which assesses whether the package complies with the strict rules used for legislation under the so-called budget reconciliation process. Late Monday, Republicans acknowledged potential 'red flags' coming from the parliamentarian's office that will require changes in the House bill before it can be sent to the Senate. Leaders are using the reconciliation process because it allows for simple majority passage in both chambers, were GOP majorities are razor-thin. House Majority Leader Steve Scalise said Republicans are preparing to address the concerns with a vote in the House, possibly as soon as this week, to change the package. Senate Democratic Leader Chuck Schumer seized on the House's upcoming do-over vote as a chance for Republicans who are dissatisfied with the package to reassert their leverage and 'force the bill back to the drawing board.' 'They say they don't like parts of the bill — now is their opportunity to change it,' Schumer said. On Tuesday, Vice President JD Vance was dispatched to speak with one GOP holdout, Sen. Ron Johnson of Wisconsin, who has pushed for deeper spending reductions in the bill to prevent skyrocketing deficits from adding to the nation's $36 trillion debt load. Other Republican senators have raised concerns about the health care cuts. But Republicans are in agreement on border security, deportation and military funding, over the objections of Democrats who fought vigorously during the committee process to strip those provisions from the bill. The package includes about $150 billion for border security and deportation operations, including funding for hiring 10,000 new ICE officers — with what Johnson said are $10,000 hiring bonuses — as well as 3,000 new Border Patrol agents and other field operations and support staff. There's also funding for a daily detention capacity for 100,000 migrants and for flights for 1 million deportations annually. The package includes $46 billion for construction of Trump's long promised wall between the U.S.-Mexico border. Additionally, the bill includes $150 billion for the Pentagon, with $5 billion for the military deployment in support of border security, along with nearly $25 billion for Trump's 'Golden Dome' defense system over the U.S. Separately, the bill adds another $21 billion for the Coast Guard. Democrats have argued against the deportations, and warned that Trump appears to be stirring up protests so he can clamp down on migrant communities. Rep. Nanette Barragan — whose district represents the suburban city of Paramount, where the weekend Home Depot raid touched off protests — implored Americans: 'Listen to the words of this administration: They're using words like insurrection. They're using words like invasion.' She warned the administration is laying the groundwork for even steeper actions. 'That's a concern,' she said. 'That is dangerous. It's wrong.'
