Trade war escalates as China hits US with huge tariff
China announced yesterday massive retaliatory tariffs on US goods, sharply escalating a trade war started by President Donald Trump and fuelling fresh panic in global markets. Trump's latest salvo of tariffs came into effect on dozens of trading partners earlier Wednesday, including punishing duties of 104% on imports of Chinese products.
Beijing originally planned to respond with a 34% tariff on imports of US products from 1601 GMT Wednesday, but the finance ministry said it would now raise the toll to 84% after Trump dramatically hiked his own duties on imports from China.
"The tariff escalation against China by the United States simply piles mistakes on top of mistakes (and) severely infringes on China's legitimate rights and interests," the ministry said.
Washington's moves "severely damage the multilateral rulesbased trade system", it added.
In a separate statement, Beijing's commerce ministry said it would blacklist six American artificial intelligence firms, including Shield AI and Sierra Nevada Corp.
"This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing," the US president said on his Truth Social platform. He urged: "DON'T WAIT, DO IT NOW!"
Trump believes his policy will revive America's lost manufacturing base by forcing companies to relocate to the United States.
But many business experts and economists question how quickly -- if ever -- this can take place and warn it could reignite inflation.
Drug makers next?
Trump has said his government was working on "tailored deals" with trading partners, with the White House saying it would prioritise allies such as Japan and South Korea, which were hit with tariffs of 24 percent and 25 percent, respectively. His top trade official, Jamieson Greer, told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs. Vietnamese goods were hit with one of the highest tariffs, at 46 percent.
Trump told a dinner with fellow Republicans on Tuesday night that countries were "dying" to make a deal.
"I'm telling you, these countries are calling us up kissing my ass," he said.
The European Union, whose goods were hit with a 20 percent tariff, is working on response that could be presented next week.
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