Trump threatens 100 per cent tariffs on China
President Donald Trump has threatened to slap additional 50 per cent tariffs on China if it doesn’t withdraw its retaliatory measures, pushing the possible level of tariffs it faces on exports to the US to over 100 per cent.
In a post on Truth Social, the US president said retaliatory Chinese tariffs on US imports of 34 per cent represented an “abuse” that added to harsh taxes US exporters were already facing.
Current tariffs faced by China are estimated to be at 54 per cent when Trump’s initial duties on imports are taken into account.
“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump said.
He also said all negotiations with China would be ended if it did not comply with his administration’s demand.
Goldman Sachs said there was a 45 per cent of a recession while analysts at UBS expect US imports to fall more than 2 per cent in the next few quarters.
“The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy in four to eight quarters,” UBS economist Jonathan Pingle said.
“Not that such a reversal is good or bad, but we went the other way over the course of 40 years. It took me twenty years to go bald. Pulling my hair out all at once would have hurt.”
Some economists are warning a heightened trade war between the US and China could divert cheap products to the UK.
The shift could lower inflation in the UK but harm businesses, according to Professor Joe Nellis, an adviser to MHA.
“Cheap goods could reduce inflation in UK but would impact businesses as they are forced to compete with foreign businesses flooding the market with cheap goods,” he said.
“If this was to happen it would take some time for the effects to kick in.”
Investors are also fearing the worst is yet to come as stocks nosedived across Europe.
Paul Diggle, an economist at investment firm Aberdeen, warned market leaders against being too optimistic about free trade agreements in the short term.
“Hgher, not lower, tariffs are more likely over the near-term as retaliation occurs,” he said.