US President Donald Trump escalated the trade war with China on Tuesday, imposing tariffs exceeding 100% on Chinese goods after Beijing refused to back down from its retaliatory measures.
This move spiralled global markets, raising concerns about a potential economic downturn.
The newly implemented 10% tariffs have already destabilised the global economy, causing significant market sell-offs and increasing fears of a recession.
Further tariff increases are scheduled for Wednesday.
China, a major US trading partner, will bear the brunt of these tariffs, which have reached 104% since Trump’s return to office.
Despite the market instability, Trump remains firm, believing his policies will revitalise US manufacturing. However, many economists and business experts are sceptical about the effectiveness of these measures and warn of rising inflation.
Trump asserted that the US is generating substantial revenue from the tariffs.
The tariff escalation follows China’s retaliatory tariffs, prompting Trump to impose an additional 50% duty.
He claims China desires a deal but lacks direction. He also announced upcoming tariffs on pharmaceuticals and increased duties on low-value Chinese imports.
The administration is pursuing “tailored deals” with allies, while other countries have offered tariff reductions.
The escalating trade conflict has triggered widespread market volatility. Global stock markets have plummeted, currencies have fluctuated, and oil prices have declined.
International reactions have been critical. The EU urged de-escalation, while China expressed confidence in its economic stability. France also criticised the policy.
The trade war has also caused internal friction within the US, with figures like Elon Musk publicly criticising Trump’s trade advisors. Canada has also imposed retaliatory tariffs.
