In a dramatic escalation of the ongoing trade war between the United States(US) and China, Beijing has announced a sharp increase in tariff on American goods—from 34% to 84%, effective Thursday. The retaliatory move is a direct response to President Donald Trump’s 104% tariff on Chinese imports, which took effect today.
This tit-for-tat development marks one of the most significant steps in the economic standoff between the world’s two largest economies.
The financial markets responded immediately to the trade escalation. On Wednesday, US stock index futures took a nosedive:
- Dow E-minis fell 1.87%
- S&P 500 E-minis dropped 1.72%
- Nasdaq 100 E-minis slipped 1.45%
Investors worldwide are expressing concern over the rising protectionism and its potential to disrupt global supply chains and undermine economic stability. Analysts have warned that the latest round of tariffs could significantly raise prices for consumers and increase costs for manufacturers reliant on international trade.
Trade War Timeline: An Ongoing Economic Cold War
The US-China trade conflict has seen multiple rounds of tariff since 2018, with both sides locking horns over issues such as intellectual property theft, trade imbalances, and technology transfers. While there have been brief moments of negotiation and truce, the latest tariffs suggest a hardening of positions on both sides.
Trump’s administration has defended the 104% tariff on Chinese goods as necessary to protect American industry and curb unfair trade practices. In contrast, China has condemned the move as a provocation that undermines global trade norms.
A spokesperson from China’s Ministry of Commerce stated:
“The United States has taken an unreasonable and extreme position in trade relations. China must respond firmly to safeguard its economic interests.”
With no immediate sign of negotiations resuming, the ripple effects of this trade confrontation are expected to impact emerging markets, global commodities, and multinational corporations heavily involved in cross-border trade.
Economists warn that a prolonged trade war could result in slowed global growth, inflationary pressures, and disrupted innovation ecosystems.
This is a developing story, and more updates are expected as both sides assess the fallout from their latest economic salvos.
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