China said on Friday it would raise tariffs on US goods to 125 per cent but would ignore further levies by President Donald Trump because it no longer makes economic sense for importers to buy from America.
After a week of market mayhem as the world’s two largest economies took turns to put up trade barriers, Beijing dismissed Trump’s mounting brinkmanship as a “joke” and a “numbers game”.
China accused Trump of unleashing turbulence in the market with the sweeping tariffs that has hit the world, and said the United States “should bear full responsibility” for the chaos.
Trump has deployed sweeping tariffs, including painfully higher levies for dozens of major economies, as a stick to force manufacturers to base themselves in the United States and for countries to lower barriers to US goods.
But following market turmoil this week, he blinked first in his push to remodel the post-war system of global commerce and froze many tariffs for 90 days, although he raised them for China to a staggering total of 145pc.
Beijing’s latest round of retaliation brings its levies to 125pc, effective Saturday.
But the Chinese finance ministry said further action by the US will be ignored because “at the current tariff level, there is no possibility of market acceptance for US goods exported to China”.
“The United States’ imposition of round upon round of abnormally high tariffs on China has become a numbers game with no practical significance in economics,” Beijing’s commerce ministry said.
“If the US continues to play the tariff numbers game, China will ignore it,” a spokesperson said.
Beijing also said it would file a lawsuit with the World Trade Organisation over the latest round of levies.
‘Beautiful thing’
Trump has acknowledged “a transition cost and transition problems” arising from his tariff strategy, but he has dismissed global market turmoil.
“In the end it’s going to be a beautiful thing,” he said.
He described the European Union as “very smart” to refrain from retaliatory levies.
“(The EU) were ready to announce retaliation. And then they heard about what we did with respect to China’,” Trump said.
But the 27-nation bloc’s chief Ursula von der Leyen told the Financial Times that it remained armed with a “wide range of countermeasures” if negotiations with Trump hit the skids.
“An example is you could put a levy on the advertising revenues of digital services” applying across the bloc, she said.
French President Emmanuel Macron also urged the EU to keep preparing action to counter the tariffs, which are only paused but not scrapped.
“With the European Commission, we must show ourselves as strong: Europe must continue to work on all the necessary counter-measures,” he said on X.
At talks with Spain’s Prime Minister Pedro Sanchez on Friday, state media quoted Xi as saying that China and the EU should simply team up on the issue.
“China and Europe should fulfil their international responsibilities… and jointly resist unilateral bullying practices,” Xi said.
This, he stressed, would not only “safeguard their own legitimate rights and interests, but also… safeguard international fairness and justice.”
‘No winners’
After new falls on Wall Street, Asian markets were under pressure again on Friday.
Tokyo sank more than 4pc — a day after surging more than 9pc — while Sydney, Seoul, Singapore and others also sagged.
European markets also retreated on China’s latest salvo.
Oil and the dollar slid on fears of a global slowdown while gold hit a new record above $3,200, as investors spooked by Trump’s erratic policies dumped normally rock-solid US Treasuries.
“The sugar high from Trump’s tariff pause is fading fast,” said Stephen Innes at SPI Asset Management.
“Bottom line: the world’s two largest economies are in a full-blown trade war — and there are no winners.”
‘Golden Age’
Critics of Trump’s policies say they are causing chaos for companies that rely on complex supply chains, alienating close allies and making goods more expensive for US consumers.
But Howard Lutnick, his commerce secretary, posted 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.”
Trump has meanwhile warned that the tariffs could come back after the 90 days.
“If we can’t make the deal we want to make… then we’d go back to where we were,” he said.
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.
As China battles to find allies against Trump’s trade war, Xi will travel next week to Vietnam, Malaysia and Cambodia, where the tariff drama is expected to feature high on the agenda.
