China’s 84% retaliatory tariffs on US goods, announced on Wednesday, were due to come into effect on Thursday
Interim summary
Hello and thanks for following our live coverage of what has been a rocky few days on global markets following President’s Trump’s shock announcement of punitive reciprocal tariffs, and now a 90-day pause for most countries, with the exception of China.
Tensions between the world’s two largest economies escalated today with China’s 84% tariffs on US imports coming into effect just hours ago.
The move was in response to Trump’s decision to hike tariffs on China to 125%.
Here is quick recap of developments to bring you up to speed.
- China’s countermeasures against the US came into effect just after midday in Beijing on Thursday in retaliation against Trump’s tariff hike on Chinese imports to 125%. Beijing has vowed to “fight to the end”, refusing to back down in the face of Trump’s efforts to bring the world’s governments to the negotiating table. The country’s commerce minister has described the tariffs as “a serious infringement of the legitimate interests of all countries”.
- After days of seemingly doubling down on his position, Trump announced a 90-day pause on the proposed reciprocal tariffs for most countries, except China. Asked about his stunning U-turn, Trump said: “Well, I thought that people were jumping a little bit out of line. They were getting yippy. They were getting a little bit afraid.”
- Asian markets, from Tokyo, to Hong Kong and Shanghai, responded positively to Trump’s tariff reprieve, with stocks rising across the board. The Hang Seng Index has climbed over 3%, or 632 points, to 20,896.95, while the Shanghai Composite Index jumped 1.29%, or 41.03 points, to 3,227.84.
- Global markets also surged after Trump announced his 90-day tariff pause. The S&P 500 surged 9.5%, while the Nasdaq jumped 12%.
- Despite the market rebound, the head of the World Trade Organization said the US-China tariff war could cut trade in goods between the two countries by 80%. Given the two economic giants account for 3% of world trade, the conflict could “severely damage the global economic outlook”,
- Addressing reporters at the White House, treasury secretary Scott Bessent said the latest changes in Donald Trump’s tariffs policy was Trump’s “strategy all along.” He said: “This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded.”
- China and the US have traded tit-for-tat tariff hikes repeatedly over the past week. “I want to emphasize that there is no winner in a trade war, and that China does not want a trade war. But the Chinese government will by no means sit by when the legitimate rights and interests of its people are being hurt and deprived,” an official of China’s ministry of commerce said in a statement on Wednesday.
- The tariff reprieve has been welcomed in South Korea, Taiwan, and Vietnam, where governments have said the pause will allow them “breathing room” and time to negotiate with the Trump administration.
- China and the European Union have exchanged views on strengthening their economic and trade cooperation in response to US tariffs, the Chinese commerce ministry said on Thursday. In a video call on Tuesday, China’s commerce minister Wang Wentao discussed with European trade and economic security commissioner Maros Sefcovic the restart of talks on trade relief and to immediately carry out negotiations on electric vehicle price commitments.
