Trump upended the world economy last week with sweeping tariffs that have raised the spectre of an international recession, but has ruled out any pause in his aggressive trade policy despite a dramatic market sell-off.
The swift retaliation from China earned a new warning from Trump that he would impose additional levies if Beijing refused to stop pushing back against his barrage of tariffs -- driving the overall levies on Chinese goods to 104 percent.
China swiftly hit back, blasting what it called “blackmailing” by the US and saying it would “never accept” such action.
“If the US escalates its tariff measures, China will resolutely take countermeasures to safeguard its own rights and interests,“ the ministry said.
Market turmoil
Wall Street stocks finished lower following a volatile session, with both the Dow and S&P 500 ending down.
Trump doubled down again on Monday, saying he was “not looking” at any pause in tariff implementation.
After equities took a huge hammering in Shanghai on Monday, China’s central bank issued a statement before trading resumed Tuesday to underline it was standing behind a sovereign fund as it buys up exchange traded funds to stabilise the market.
A 10 percent “baseline” tariff on US imports from around the world took effect Saturday, and a slew of countries will be hit by higher duties from Wednesday, including the levy of 34 percent for Chinese goods as well as 20 percent for EU products.
While meeting Israel’s Prime Minister Benjamin Netanyahu, the first leader to lobby Trump in person over the levies, the US President said: “There can be permanent tariffs, and there can also be negotiations, because there are things that we need beyond tariffs.”
“We must not exclude any option on goods, on services,“ said French Trade Minister Laurent Saint-Martin.
Inflation? Recession?
The 78-year-old Republican believes that the tariffs will revive America’s lost manufacturing base by forcing foreign companies to relocate to the United States, rather than making goods abroad.
JPMorgan Chase CEO Jamie Dimon warned of coming inflation, adding “whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth”.
He warned of a jobs crunch and rising prices, saying a recession would mean a “bloodbath” for Republicans in mid-term elections next year.
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