Trade tensions between the United States and China intensified on April 9 as President Donald Trump imposed a 125% tariff on Chinese imports, just hours after Beijing raised its own tariffs on US goods to 84%.
The new US tariffs, building on a previous 104% rate, are aimed at forcing China to address trade imbalances and crack down on fentanyl trafficking. In response, China's Commerce Ministry described the move as "blackmail" and vowed to retaliate while still calling for dialogue.
Beijing's new tariffs, which took effect at midnight on April 9, reflect years of escalating friction between the two economic giants. With President Trump now in his second term, China appears more prepared to push back against Washington's aggressive trade agenda.
The consequences of this renewed tariff war are already reverberating. Global supply chains face renewed disruption, while prices for electronics and other consumer goods in the US are expected to rise. On April 7, the Dow dropped by 0.9%, reflecting growing investor unease.
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The latest US move includes a 10% tariff hike on imports from Canada and Mexico, although most other countries are exempted for 90 days. This leaves China as the primary focus of Trump's tariff pressure.
Analysts warn that while the tariffs may give Washington short-term leverage, they also risk long-term damage. Chinese exporters could shift to alternative markets, while US consumers and businesses may absorb higher costs.
Though Trump hinted at a possible deal on his Truth Social platform, there's little optimism for an immediate resolution. China's firm stance suggests that both sides are settling in for a prolonged standoff.
With the 125% tariff now the steepest in the ongoing dispute, the global economy could be in for a long period of uncertainty and reconfiguration of trade flows.
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