The United States is raising its import tariffs on Chinese goods to a staggering 104 per cent, White House spokeswoman Karoline Leavitt announced on Fox Business. The measure will take effect on Wednesday.
Originally, an additional 34 per cent tariff on Chinese imports was to take effect at midnight. In response, China threatened to retaliate with a 34 per cent tariff on American goods. US President Donald Trump then warned that if China did not back down, he would impose an additional 50 per cent tariff – which is now set to go into effect.
This new 84 per cent increase comes on top of a previously announced 20 per cent tariff, meaning that goods imported from China will effectively more than double in price.
Zero tariffs insufficient
On Monday evening, Trump also dismissed the European Commission’s proposal for reciprocal zero tariffs on manufactured goods as “insufficient”. He has no plans to lower US import tariffs, he said at a White House press conference.
Despite the escalating trade tensions, global markets rebounded on Tuesday after several days of steep losses. European bourses closed significantly higher: Paris gained 2.50 per cent, Frankfurt 2.48 per cent, London 2.71 per cent, Milan 2.44 per cent and Amsterdam 2.8 per cent. Brussels outperformed them all, with the BEL20 up 3.10 per cent.
Wall Street
Wall Street also opened sharply higher on Tuesday. Shortly after the opening bell, the Dow Jones Industrial Average was up 3.5 per cent, the tech-heavy Nasdaq climbed 3.7 per cent and the broad S&P 500 was up 3.3 per cent.
Investor sentiment has been boosted, in part, by the prospect of possible trade talks between Japan and the United States. Attention now turns to how markets will react to the sharp increase in tariffs on Chinese imports.
