CHINA has announced additional tariffs of 34 per cent on US goods, striking back at President Donald Trump and escalating a trade war that has fed fears of a recession and triggered a global stock market rout that showed no sign of slowing.
In the standoff between the world’s two biggest economies, Beijing also announced controls on exports of some rare earths, while Trump doubled down as well, vowing not to change course.
China yesterday added 11 US bodies to the ‘unreliable entity’ list, which allows Beijing to take punitive actions against foreign entities, including firms linked to arms sales to Taiwan, which China claims as part of its territory.
Other impacted nations like Canada have also readied retaliation in a mounting trade war after Trump raised US tariff barriers to their highest level in more than a century, leading to a plunge in world financial markets.
Investment bank J P Morgan said it now sees a 60pc chance of the global economy entering recession by year-end, up from 40pc previously.
Wall Street fell sharply, after China announced its retaliatory tariffs a day after the Trump administration’s sweeping levies knocked off $2.4 trillion from US equities.
Federal Reserve Chair Jerome Powell said the tariffs were ‘larger than expected’ and elevated the risk of both higher inflation and slower growth.
In Japan, one of United States’ top trading partners, Prime Minister Shigeru Ishiba said the tariffs had created a ‘national crisis’ as a plunge in banking shares yesterday set Tokyo’s stock market on course for its worst week in years.
China is retaliating for Trump’s tariffs on imports from the world’s No 2 economy. The European Union faces a 20pc duty. Trump says ‘reciprocal’ tariffs are a response to barriers put on US goods.
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