Trump Increases Trade War with China to 104%
The White House announced on Tuesday that the Trump administration will impose 104% tariffs on China starting at 12:01 a.m. Wednesday. This decision came after President Donald Trump threatened additional tariffs of 50% on Chinese imports, on top of the initial 20% tariffs that were supplemented by 34% reciprocal levies on Wednesday in response to Beijing’s 34% tax announcement. White House press secretary Karoline Leavitt stated that the full package of more than 100% in levies would take effect overnight. She emphasized that China’s retaliation was a mistake, prompting Trump to retaliate harder with the 104% tariffs. Leavitt mentioned that Trump is open to making a deal with China if they reach out, but he will prioritize what is best for the American people.
In the latest market updates, the stock market experienced fluctuations amid the tariff tensions and threats between the U.S. and China. While global markets initially reacted positively to talks of tariff negotiations with various countries, tensions with China continued to escalate, resulting in market losses by the afternoon. The Dow, S&P 500, and Nasdaq indices all registered declines before the market closed.
The tough rhetoric between the U.S. and China regarding tariffs intensified, with Beijing denouncing Trump’s additional tariff threats as “blackmail” and vowing to resist. Trump expressed his willingness to make a deal with China but emphasized that the ball is in Beijing’s court to initiate contact. Treasury Secretary Scott Bessent criticized China’s defiant response to the tariff threats, while Trump and his administration highlighted the interest of other countries in negotiating tariff deals with the U.S.
Trump’s economic adviser, Kevin Hassett, shared that the administration is prioritizing discussions with America’s key allies and trading partners for tariff negotiations. He mentioned engagements with South Korea and Japan as examples of Trump’s focus on strengthening ties with allies during the tariffs talks.
“There are numerous concessions being discussed,” Hassett stated. “Ultimately, the president will make the final decision on whether the terms are satisfactory to reconsider the tariffs.”
Top trade official defends Trump’s tariffs to Congress
U.S. Trade Representative Jamieson Greer defended President Trump’s contentious tariffs during a hearing before the Senate Finance Committee on Tuesday morning.
Greer emphasized the need to shift towards an economy that focuses on producing tangible goods and services to create job opportunities for working and middle-class Americans in their local communities. Despite the potential challenges of this transition, Greer expressed confidence in the American people’s ability to adapt and succeed as they have done in the past.
While acknowledging the economic concerns raised by the tariffs, Republican members of the committee expressed optimism about the potential positive impacts of Trump’s trade policies.
Senator Ron Wyden, the ranking Democrat on the committee, criticized the lack of clarity on the objectives of the tariffs from Trump and his advisors, stating that the U.S. economy’s reputation has deteriorated rapidly.
GOP lawmakers express skepticism
Some Republican lawmakers, including Senator Thom Tillis of North Carolina, are growing wary of the consequences of the tariffs on their constituents, particularly with the upcoming midterm elections.
Tillis voiced his doubts about the policy at the hearing, questioning who would be held accountable if the tariffs prove to be detrimental. He cautioned that voters may hold Republicans accountable next year if the economy is not improved by February.
Trump hints at potential deal with South Korea
Trump hinted at a possible deal with South Korea and mentioned ongoing negotiations with other nations like China. He expressed optimism about reaching favorable agreements beyond trade and tariffs.
Indonesia announces concessions
Indonesia revealed plans to purchase gas and soybeans from the U.S., as well as reduce tariffs on electronic goods and steel as part of negotiations to address U.S. tariffs.
British finance minister emphasizes need to avoid trade war
British finance minister Rachel Reeves stressed the importance of avoiding a trade war and expressed a commitment to negotiating a mutually beneficial agreement to reduce tariffs imposed by Trump.
“The United States is taking actions that align with our national interests.” President Trump has implemented a 10% tariff on most imports from Britain and a 25% tariff on key sectors such as cars and steel. Treasury Secretary Bessent criticized China’s defiant response to Trump’s tariff threats, stating that such a stance would not yield positive results. “We are the deficit country,” the Treasury secretary explained in an interview with CNBC. “So what do we lose if China raises tariffs on us? We export one fifth to them of what they export to us. It’s a losing hand for them.”
Bessent emphasized the potential for beneficial outcomes from tariff negotiations and dismissed the idea that these actions were affecting market trends. Small businesses are bracing themselves for potential hardships due to tariffs, with concerns raised about the long-term impact on the economy and businesses. Ben Johnston, COO of Kapitus, expressed uncertainty about the future implications of tariffs on small businesses, highlighting the challenges they may face in adjusting to increased costs and disrupted supply chains.
President Trump defended his decision to impose tariffs, stating that it presents an opportunity to reshape trade dynamics. He emphasized his willingness to maintain permanent tariffs while engaging in negotiations with other countries. The uncertainty surrounding trade policies has led to market fluctuations and concerns about a potential recession. Economists warn of the high likelihood of a recession in the U.S., emphasizing the need for a clear understanding of economic indicators.
A correction in the stock market typically refers to a decrease of at least 10% from its recent peak, which is distinct from entering bear market territory – a drop of 20% or more. Corrections can impact individual stocks, bonds, or major indexes like the Dow, S&P 500, and Nasdaq. Various factors such as shifts in economic policy, job or inflation data releases, and corporate earnings reports can trigger a correction. – Rachel Barber, with contributions from Reuters. This article was first published on USA TODAY: “Tariffs live updates: China tariffs set to rise to 104% on Wednesday.”
