Washington: Despite China’s harsh response to the U.S. tariffs on the U.S. reached 125%, President Trump described his tariff strategy as a positive move to the U.S. and the world, emphasizing that his policies “do well.”
The dollar fell and stocks were turned away after investors dumped U.S. government bonds, Beijing’s retaliation against Trump deepened concerns about already traumatized global markets.
Trump announced import taxes last week on dozens of trading partners, sending financial markets to the tail until it suddenly reduced it to 10% within 90 days, while raising taxes from Chinese goods.
“We’ve done a really good job in tariff policies,” Trump said in an article on his Truth Social Network after China announced its latest hike.
He wrote: “It’s very exciting for the United States and the world!!! It’s growing rapidly.”
The White House later said Trump remained “optimistic” about a deal with China, adding that 15 other countries received a “on-the-table” offer in their tariffs during their 90-day pause.
But press secretary Karoline Leavitt added: “The president is very clear that when the United States gets punched, he will work harder.”
The U.S. and Beijing have been trading increasingly stringent tariffs since last week.
Chinese President Xi Jinping’s first major comment on tensions on Friday, with state media quoted him as saying his country was “not afraid.”
Xi Jinping also said that the EU and China should “jointly resist unilateral bullying” in talks with Spanish Prime Minister Pedro Sanchez.
“Digital Game”
Beijing announced after Xi Jinping’s comments that new tariffs on U.S. goods will take effect on Saturday, almost matching the astonishing 145% imposed by Chinese goods entering the U.S.
A spokesman for China’s Ministry of Commerce said the United States has assumed full responsibility to treat Trump’s tariffs as a “digital game” and “will become a joke.”
But China’s Ministry of Finance said tariffs will not be higher without acknowledging that imports at the new level are nearly impossible.
Trump reiterated on Thursday that he hopes to reach a deal with XI despite rising tensions.
“He has been my friend for a long time. I think we will end up doing something that is very favorable for both countries,” he told reporters.
But U.S. officials have made it clear that they want XI to lend a helping hand first.
However, as the market continues to worry, Trump’s pressure is increasing.
Yields on key U.S. government bonds rose again Friday, suggesting weaker demand as investors feel feared.
The White House said it has no evidence that traders speculation suggests that China is unloading its massive holdings – increasing the cost of U.S. government borrowing – retaliation.
Meanwhile, Fed policymakers warned that inflation is higher and growth is slower due to Trump’s tariff policy.
“Countermeasures”
Economists warn that trade disruption between the tightly integrated U.S. and Chinese economies will raise consumer prices and potentially trigger a global recession.
Ipek Ozkardeskaya, an analyst at Swissquote Bank, told AFP that the tariff numbers were “so high that they no longer make sense”, but China “is ready to do its best now.”
The rest of the world is still calibrating its response.
Trump on Thursday described the European Union as Trump initially hit by 20% tariffs, which was “very clever” because it avoided retaliatory taxes.
Brussels announced that top EU officials and Chinese leaders will hold their next summit in China in July. EU trade chief Maros Sefcovic will hold talks in Washington on Monday.
But G27 chief Ursula von der Leyen told the Financial Times on Friday it still has “a broad response” that includes the potential hit to digital services that will hit U.S. tech companies.
