Trump Cranks Up Trade War

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Global Markets Plunge as Trump Imposes Higher Tariffs on China

Equities and oil plunged again on Wednesday after Donald Trump ramped up his trade war by hitting China with tariffs of more than 100 per cent as sweeping measures against the United States’ dozens of partners are set to come into effect.

Market Reaction

After a brief respite Tuesday from the panic-selling at the start of the week, investors were once again scurrying for the hills amid fears that the US president’s hammer blow to global commerce will plunge the economy into a recession.

Tariffs and Retaliation

The two economic superpowers were headed for a vicious standoff after Trump said China would be hit with another 50 per cent levy in response to its retaliation in kind to his initial 34 per cent duty announced last week.

With Beijing already subject to a 20 per cent toll, its exporters are now facing tariffs of up to 104 per cent.

Global Response

China has blasted what it called US blackmail and vowed to “fight it to the end”, fanning worries the crisis could spiral out of control.

The European Union could unveil its response next week, with French President Emmanuel Macron calling for Washington to reconsider but adding that if the bloc was forced to respond “so be it”.

Impact on Markets

In response to steel and aluminium levies that took effect last month, Brussels is planning measures of up to 25 per cent on US goods ranging from soybeans to motorcycles, according to a document seen by AFP.

Chinese Premier Li Qiang told EU chief Ursula von der Leyen that Beijing had the “tools” to handle headwinds, according to state news agency Xinhua.

Conclusion

The US President’s decision to impose higher tariffs on China has sent shockwaves through global markets, with equities and oil plummeting in response. The tariffs have sparked a vicious standoff between the two economic superpowers, and the global response remains uncertain. As the crisis unfolds, investors are bracing themselves for the potential impact on the economy and the likelihood of a recession.

FAQs

Q: What are the tariffs imposed by the US on China?
A: The US has imposed tariffs of more than 100 per cent on China, with the latest addition being a 50 per cent levy.

Q: What is the response from China?
A: China has blasted the US tariffs as “blackmail” and vowed to “fight it to the end”.

Q: What is the impact on global markets?
A: The tariffs have sent global markets into a tailspin, with equities and oil plummeting in response.

Q: What is the likelihood of a recession?
A: According to Jack Ablin of Cresset Capital, the market now sees a greater than 50 per cent chance of a US recession.