Beijing has vowed to fight a trade war “to the end” against Trump, who remained defiant despite major US indexes tumbling again on Tuesday local time.
The US President 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, warning of higher inflation as the tariffs raise prices.
Trump on Tuesday local time said the United States was “taking in almost US$2 billion a day [$3.61b]” from tariffs.
He originally unveiled a 34% additional tariff on Chinese goods.
But after China countered with its own 34% tariff on American products, he vowed to pile on another 50% duty, signing the executive order for the higher fee on Tuesday.
Counting existing levies imposed in February and March, that would take the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104%.
Trump insisted the ball was in China’s court, saying Beijing “wants to make a deal, badly, but they don’t know how to get it started”.
Late Tuesday, Trump also said the United States would announce a major tariff on pharmaceuticals “very shortly”.
He also signed an order allowing significantly higher duties on low-value Chinese imports to take effect starting early next month.
And he told a dinner with fellow Republicans that countries were “dying” to make a deal.
“I’m telling you, these countries are calling us up kissing my ass,” he said.
Separately, Canada said that its tariffs on certain US auto imports will come into force on Wednesday local time.
China ‘confident’
After trillions in equity value were wiped off global bourses in the last days, markets in Asia opened down again on Wednesday, with Hong Kong plunging more than 3% and Japan’s Nikkei sinking 2.7%.
The foreign exchange markets also witnessed ructions, with the South Korean won falling to its lowest level against the US dollar since 2009 on Tuesday.
China’s offshore yuan also fell to an all-time low against the US dollar, as Beijing’s central bank moved to weaken the yuan on Wednesday for what Bloomberg said was the fifth day in a row.
Oil prices slumped, with the West Texas Intermediate closing below US$60 for the first time since April 2021.
China also condemned remarks by US Vice-President JD Vance in which he said the United States had for too long borrowed money from “Chinese peasants”.
The European Union sought to cool tensions, with the bloc’s chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese Premier Li Qiang.
She stressed stability for the world’s economy, alongside “the need to avoid further escalation”, said an EU readout.
The Chinese premier told von der Leyen his country could weather the storm, saying it “is fully confident of maintaining sustained and healthy economic development”.
The EU – which Trump has criticised bitterly over its tariff regime – may unveil its response next week to new 20% levies it faces.
French President Emmanuel Macron called on Trump to reconsider, adding if the EU was forced to respond, “so be it”.
In retaliation against US steel and aluminium levies that took effect last month, the EU plans tariffs of up to 25% on American goods ranging from soybeans to motorcycles, according to a document seen by AFP.
‘Tailored deals’
Trump said on Tuesday local time that his Government was working on “tailored deals” with trading partners, with the White House saying it would prioritise allies like Japan and South Korea.
His top trade official Jamieson Greer told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs.
Wall Street’s major indices closed lower on Tuesday, with the broad-based S&P 500 falling 1.6%.
In one public sign of friction over tariffs, key Trump ally Elon Musk described senior White House trade adviser Peter Navarro as “dumber than a sack of bricks”.
Musk, who has signalled his opposition to Trump’s trade policy, hit out after Navarro described his Tesla company as “a car assembler” that wants cheap foreign parts.
– Agence France-Presse
