The US has opened a new page in its trade war with China. President Donald Trump announced that the customs duty on products imported from China has been increased to 125 percent, effective immediately. The tax increase was implemented in response to China’s uncompromising stance.
A second act in the US-China economic war
Trump also announced that he has postponed the new tax rates for 75 countries that did not retaliate against the US for 90 days. During this period, the customs duty rate applied to these countries has been temporarily reduced to 10 percent.
The Chinese Ministry of Finance has made a new retaliatory decision in response to the steps taken by the US. The ministry announced that the additional customs duty on US-origin goods will come into effect as of April 10 and that this duty will be applied as 84 percent. This rate was previously announced as 34 percent.
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In a statement made by China, it was stated that this decision is a direct response to the US’s aggressive trade policies. Trump reiterated his criticisms of China’s trade system in a written statement and declared that “ripping off” the US and other countries is no longer acceptable.
The US’s decision to halt tariffs for 75 countries for 90 days was attributed to the fact that these countries have not retaliated against the US. Trump states that a constructive process is taking place in the negotiations with these countries.
Following Trump’s statements, there was a sharp increase in US stock markets. The Nasdaq increased by over 10 percent, showing its strongest single-day performance since October 13, 2008. The Dow Jones index also gained 6.3 percent, exceeding 2,600 points.
The S&P 500 rose by 7.5 percent. According to data from financial analysis firm FactSet, this increase partially offset the recent losses in the markets. The decision to halt tariffs for 90 days also caused a rapid increase in technology stocks.
Apple shares gained 12 percent, Tesla 14 percent, Amazon 8 percent, Meta 9 percent, Alphabet 7 percent, and Microsoft 8 percent. Analysts attribute this increase to a temporary decrease in tension in the trade war and an increase in investors’ risk appetite.
The effects of the decision on the global economy will continue to be monitored. So what do you think about this issue? You can share your views with us in the comments section below.
