KEY POINTS
- US-China trade war escalates after Washington raises total tariffs on Chinese imports to 145%
- Earlier reports cited a 125% hike but the White House clarified this excludes a pre-existing 20% levy
- China retaliates with 84% tariffs on US imports
- Trump’s climbdown on broader global tariffs brings partial relief to other countries
- EU welcomes Trump’s partial reversal and pauses its own retaliatory tariffs
- Global markets react mixed: Tokyo surges 9.1%, while Wall Street falls sharply
- Gold hits record highs, and the US dollar weakens amid uncertainty
WASHINGTON: The United States-China trade war intensified Thursday, sending the global economy into unknown territory and dampening relief after President Donald Trump’s earlier climbdown from a wider tariff onslaught against the rest of the world.
The White House clarified that Trump’s big hike in tariffs on China announced 24 hours earlier had actually taken his total levies this year on imports from the world’s second-biggest economy to a staggering total of 145 percent — not the previously reported 125 percent.
This was because latest tariff hike comes on top of a 20 percent tariff already imposed earlier. China has retaliated with levies of 84 percent on US imports.
The superpower confrontation threw a deep shadow over jubilation that Trump was retreating from threats to impose punishing tariffs on dozens of other countries — everywhere from European Union allies to Asian manufacturing hubs like Vietnam and even tiny, remote ocean islands.
Trump maintained a blanket 10 percent tariff on most countries. However, his retreat from more damaging levies against European countries prompted the EU to pause plans for its own retaliation.
Amid relief, Asian and European stock markets rocketed, with Tokyo closing 9.1 percent higher.
But the realization that Trump’s splashy about-face on Wednesday masked the reality of a surging trade war with China dampened spirits.
The Dow Jones in New York fell more than three percent and the S&P dropped 4.5 percent in morning trading. Gold prices hit a record high as the US dollar crumbled.
EU wants trade negotiations
Trump says he wants to use tariffs to reorder the world economy by forcing manufacturers to base themselves in the United States.
Howard Lutnick, his commerce secretary, was bullish, posting on social media Thursday that “the Golden Age is coming. We are committed to protecting our interests, engaging in global negotiations and exploding our economy.”
Amid questions over how far Trump is ready to push, the European Union welcomed the US president’s partial row-back on his original threat to impose 20 percent tariffs against the bloc.
The 27-nation grouping responded with its own olive branch, suspending for 90 days tariffs on 20 billion euros’ worth of US goods that had been greenlit in retaliation to duties on steel and aluminium.
“We want to give negotiations a chance,” EU chief Ursula von der Leyen said in a statement.
ALSO READ: Trump Announces 90-Day Reciprocal Tariff Pause for All Countries Except China
She warned, however, that “if negotiations are not satisfactory, our countermeasures will kick in” and that all options remain on the table.
US will meet China halfway
Canadian Prime Minister Mark Carney called Trump’s reversal a “welcome reprieve” and said Ottawa would begin negotiations with Washington on a new economic deal after elections on April 28.
Vietnam said it had agreed with the United States to start trade talks, while Pakistan is sending a delegation to Washington.
In its latest measure, Beijing announced it would reduce the number of Hollywood films imported, but said it remained ready for dialogue.
“We hope the US will meet China halfway, and, based on the principles of mutual respect, peaceful coexistence and win-win cooperation, properly resolve differences through dialogue and consultation,” Commerce Ministry spokeswoman He Yongqian said.
Trump’s latest executive order hiking tariffs on Chinese imports also raises a separate US duty on low-value packages imported from China — for the third time in eight days.
Until this year, the tariff exemption had provided the China-based online retailers Shein and Temu with a major advantage over many of their competitors.
US imposes 145% tariffs on Chinese goods
Starting May 2, US-bound packages from China valued at $800 or less will face a 120 percent tariff rate, according to the order.
This is an increase of 30 percentage points over a previous executive action signed Tuesday, which tripled de minimis tariffs to 90 percent.
The order signed Wednesday also increases the “per postal item” cost for those low-value shipments to $100 starting May 2, rising to $200 on June 1.
The order allows transportation carriers delivering the shipments to choose whether to pay the percentage rate or the flat rate — but they are locked into that choice and can only change it once a month.
The tariffs imposed on Chinese goods coming into the US is at 145 percent, the White House has clarified.
On Wednesday, Trump said he was hiking the levy to 125 percent.
However, the administration on Thursday confirmed that the figure did not include a pre-existing tariff of 20 percent, which is being added on top – bringing the total to 145 percent, higher than we thought previously. – Agencies
