United States of America President, Donald Trump, has threatened to impose additional 50 per cent tariff on Beijing if it does not withdraw its 34 per cent retaliatory tariffs on Washington.
China, the second largest economy in the world, had reacted swiftly to the import tax announced by Trump last week, slamming Washington with 34 per cent tariff even as the rest of the countries continued to weigh their next move, opting either to negotiate or put their retaliatory tariffs forward.
If the extra 50 per cent tax is implemented, that would bring the total import tax on China to 104 percent, roughly doubling the cost for companies bringing their goods from China to US in less than a month.
In a similar move, President Trump had threatened to hit alcohol from Europe with a 200 percent tax and also place a 50 percent tariff on Canada's steel and aluminium "if they team up to work against American's interest".
However, both sides reached a kind of concessions and the hikes never materialised.
As the clash between both countries (US and China) rages on, Beijing has described Trump's "reciprocal tariffs" as intimidation, stressing that threats and pressure are not the right way to deal with China.
The Spokesperson for Chinese Foreign Ministry, Lin Jian, speaking during a press conference stated that the tariffs are typical unilateralism and protectionism and economic bullying, adding that U.S. tariffs in the name of reciprocity only served its interest at the expense of other countries.
Jian, therefore, urged countries to jointly oppose all forms of unilateralism and protectionism and safeguard the international system and the multilateral trading system, according to the United Nations and World Trade Organisation values, respectively.
"The abuse of tariffs by the United States is tantamount to depriving countries, especially those in the Global South, of their right to development," said, citing a widening gap between the rich and poor in each country and less developed countries suffering a greater impact.
"All countries should uphold consultation, joint construction and sharing, and genuine multilateralism", he said.
Meanwhile, the European Commission, said it has offered a zero-for-zero tariff deal to the US to avert a trade war with Trump as the EU ministers agreed to prioritise negotiations, while striking back with targeted countermeasures next week.
The 27-nation bloc faces 25 percent import tariffs on steel and aluminium and cars and broader tariffs of 20 percent from Wednesday, April 9, for almost all other goods under Trump's policy to hit countries Trump believes impose high barriers on U.S. imports.
Ministers overseeing trade in the bloc met in Luxembourg yesterday to debate the EU's response and discuss relations with China where many agreed that the priority was to launch negotiations to remove Trump's tariffs, rather than fight them.
This is even the stock markets around the US, Europe and Asia have continued to plunge on the back of the tariff war. In US, major markets continued to slump with the Dow Jones falling by 4.4 percent at mid-day, the S&P 500 lost 4.7 percent while the Nasdaq fell by five percent.
In Hong Kong, the Hang Seng Index closed down 13.22 percent, marking a 28-year low for the exchange.
In Taiwan, a 9.7 percent drop at close resulted in a record low for Taipei's TAIEX index
In Europe, the UK's FTSE 100 index fell to its lowest level in a year, dropping by nearly six percent, while Germany's Dax plunged almost 10 percent at the start of trading yesterday.
This comes as the UK Prime Minister, Keir Starmer, said tariffs, which are a tax on imports, are a "huge challenge."
Trump's officials have continued to be dismissive the impact of the tariff war on the global economy and stock markets.
Peter Navarro,Trump's trade adviser, said that the administration has been seeing a "beautiful situation" with the stock market and prices since the tariffs were introduced and advised businesses not to panic about what they are seeing on the stock market.
According to him, "any discussion of recession seems silly."
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