China has announced it is to impose additional tariffs on US goods.
The tariffs will come into force from tomorrow, China’s finance ministry said.
It means tariffs of 84% will be enforced on US goods – up from the 34% China had previously planned.
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It signals an escalation of the global trade war and comes after the US hit Beijing with an extra 50% tariff this week.
That followed two previous levies of 34% and 20%, meaning US tariffs on China reached 104% from this morning.
Following the imposition of the tariffs, and the new levy on some Chinese imports, the FTSE 100 fell again, wiping out most of Tuesday’s gains.
As part of a new complaint to the World Trade Organisation, China said the United States’ decision to impose tariffs threatened to further destabilise global trade.
“The situation has dangerously escalated,” China said in a statement.
“As one of the affected members, China expresses grave concern and firm opposition to this reckless move.”
Sky’s Asia correspondent Helen-Ann Smith said: “China is really the only nation in the world at the moment that is choosing to take a stand.
“While others are publicly making concessions and sending delegations to negotiate, China has clearly calculated that not being seen to be bullied is worth the cost that retaliation will bring.”
She said: “The impact is going to be absolutely enormous – the whole of the world has been watching all day to see what China would do, and in the end it was decisive.
“When you take a step back and look at these massive numbers, what it really amounts to is trade between the world’s two biggest economies, almost impossible in practical terms now, just completely decimated in a matter of weeks.
“It is really hard to overstate the impact that will have not just here in China, but on the global economy as well.
“In the end, China made a calculation that it just couldn’t be seen to not respond… giving in isn’t an option.”
She added: “These two superpowers have disagreed over so much over the years, and trade has really been the backstop, the one issue over which they were always linked – without that, there are real questions as to where this relationship goes next.”
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The White House has signalled the US has no intention of backing down, with the US responding by calling China back to the negotiating table.
Treasury Secretary Scott Bessent described the move as “unfortunate” and a “loser” for China.
“I think it’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” Mr Bessent said in an interview with Fox Business Network.
“Their exports to the US are five times our exports to China. They can raise their tariffs, but so what?”
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The European Union is in discussion about its own retaliatory measures.
The European Commission said on Wednesday it had secured backing from EU countries and would press ahead with a first set of countermeasures from 15 April against US President Donald Trump’s 25% import tariffs on steel and aluminium.
The 27-nation bloc will put in place extra duties mostly of 25% on a range of US imports in response specifically to the US metals tariffs. It is still assessing how to respond to the car and broader levies.
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