China has announced it will raise its tariff on US goods from 34 percent to 84 percent starting April 10.
The 50-point increase mirrors the additional 50 percent tariff recently added by the US, which brought its total tariff on Chinese imports to 104 percent.
The new tariff announcement was given during China Central Television’s evening news programme, in a release from the commerce ministry.
It said China would put an additional 50 percent tariff on all US goods coming into the country – that adds up to 84 percent. China is also adding six US firms to an unreliable entity list and adding 12 firms to an export control list.
That means Chinese companies cannot do business with these firms. We’re still waiting to hear the names of them firms. The measures will come into effect at midnight US Eastern Time.
We’re already seeing signs that investors are very worried, if not panicking. But we shouldn’t really be surprised. Beijing has been threatening countermeasures if the Trump administration doesn’t draw back its own additional tariffs.
China’s neighbours – Japan, South Korea, Vietnam – have done the opposite of Beijing, scheduling calls with the Trump administration to try to cut a deal. But here we have Beijing taking a stand and following through on its words that it’s going to fight until the end.
Announcing the move in a policy paper, China’s commerce ministry said the US tariff escalation is counterproductive, warning that Beijing “has the firm will and abundant means to take necessary countermeasures and fight to the end”.
“History and facts have proven that the United States’ increase in tariffs will not solve its own problems,” said the policy statement. “Instead, it will trigger sharp fluctuations in financial markets, push up US inflation pressure, weaken the US industrial base and increase the risk of a US economic recession, which will ultimately only backfire on itself.
The ministry also pushed back on the notion of a lopsided trade relationship, arguing that when accounting for services and earnings from US firms operating inside China, economic exchange between the two countries is “roughly balanced.”
