China Refuses to Bow to Trump's Tariff Threats

WASHINGTON DC, MONDAY - United States President Donald Trump will increase import tariffs on Chinese products. The increase will be implemented if China insists on imposing similar tariffs on U.S. goods entering China.

Trump announced that China would be subjected to an additional 50 percent import duty. This will be implemented if by Tuesday (8/4/2024), China does not revoke the 34 percent import duty on all imports from the U.S. Trump also threatened to cancel all planned trade negotiations with China.

China refuses to yield to pressure or threats from Trump and will continue with its planned retaliation. If the U.S. intends to cooperate with China, it should not be through coercion, let alone threats.

"We will protect our legitimate rights and interests. The hegemonic actions of the U.S. in the name of 'reciprocity' serve its selfish interests by sacrificing the legitimate interests of other countries and prioritizing America over international rules. This is characteristic of unilateralism, protectionism, and economic intimidation," said Liu Pengyu, spokesperson for the Chinese Embassy to the U.S.

If Trump imposes an additional 50 percent tariff, it means U.S. companies will pay a total tariff of 104 percent on imports from China. The total now becomes 104 percent because the tariff is an addition to the 20 percent tariff already implemented last March. Then there is an additional 34 percent announced last week.

Officials from China's Ministry of Commerce have met with representatives from 20 U.S. businesses, including Tesla and GE Healthcare. During the meeting, China urged U.S. companies to take concrete actions to address tariff issues. During the discussion, China's Vice Minister of Commerce, Ling Ji, pledged that China would remain open to foreign investment.

The rising tensions between the US and China have heightened concerns about the possibility of a global trade war. Tariffs would deal a severe blow to Chinese manufacturers who view the US as a primary export market. Uncertainty surrounding tariffs has caused global stock markets to fluctuate.

Markets worldwide plummeted after Trump announced new tariffs on imports from nearly all countries. The value of U.S. stock markets sharply declined again at the opening. Meanwhile, Europe's largest markets, including London's FTSE 100, all closed down by more than 4 percent.

Asian stock indexes plunged, with Hong Kong's Hang Seng Index down more than 13 percent, its biggest one-day drop since 1997. The Dow Jones Industrial Average fell 1,200 points as trading began Monday morning.

Some Trump allies are sounding the alarm about the economic damage. Financial forecasts also point to more pain ahead for U.S. businesses, consumers and investors.

Trump continues to insist his tariffs are needed to rebalance global trade and rebuild domestic manufacturing.

He accused other countries of taking advantage of the US in international trade. He accused China of being the main perpetrator.

Trump won’t roll back tariffs despite global market turmoil. “Sometimes you have to take medicine to fix something,” Trump said.

Goldman Sachs issued a new forecast saying a recession is more likely even if Trump rolls back tariffs. Economic growth is expected to slow dramatically amid tightening financial conditions, foreign consumer boycotts and a continued surge in policy uncertainty. That could put more pressure on capital spending than previously thought.

European Commission President Ursula von der Leyen said the European Union (EU) will focus on trade with countries other than the US. She believes there are big opportunities elsewhere.

The European Commission has offered a “zero-for-zero” tariff deal to avoid a trade war with the US. This is because the EU agreed to prioritize negotiations. Talks with the US are still in the early stages and the “zero-for-zero” tariffs are on cars and other industrial products.

While negotiating, the EU retaliated with a 25 percent tariff on some US imports. The tariffs will take effect on May 16, 2025.

The EU faces 25 percent import tariffs on steel, aluminum and cars. There are also 20 percent tariffs on almost everything else. The EU has already created a list of products that will be subject to 25 percent tariffs.

Polish Deputy Economy Minister Michal Baranowski said the EU prioritized starting negotiations to remove Trump's tariffs, not fighting them. The EU said it did not want to act too quickly and was ready to consider all options.

French Trade Minister Laurent Saint-Martin said the EU was also considering an EU Anti-Coercion Instrument that would allow the EU to target U.S. services or limit U.S. companies' access to EU public procurement tenders. "We are ready to use every tool to protect the single market," he said.

In a tariff war on goods, Brussels has fewer targets than Washington. This is because the EU’s imports of goods from the US total 334 billion euros ($366.2 billion) in 2024, while EU exports to the US are around 532 billion euros. Some EU member states, particularly those involved in trade with the US, are urging caution.

Irish Foreign Minister Simon Harris described the EU's Anti-Coercion Instrument as a "nuclear option". German Economy Minister Robert Habeck said the EU should realise it was in a stronger position if it stood united.

"The stock market has already collapsed and the damage could be even greater. America is in a weak position," he said.

The EU's proposal for tariff exemptions on industrial products, including cars, Trump said, was not enough to address the transatlantic trade deficit. The EU's trade deficit, Trump said, would disappear quickly if European countries started buying US energy in amounts equal to the trade deficit.

"The European Union has been very, very bad to us. They don't buy our cars, like Japan does, they don't take our farm products. They don't take anything," Trump said.

White House trade adviser Peter Navarro suggested countries would need to do more than just lower their own tariffs to reach a deal. Navarro called on them to make structural changes to their tax codes and regulations.

“Let’s take Vietnam as an example,” he said on CNBC. “When they come to us and say, ‘We will have zero tariffs,’ it means nothing to us because what matters is non-tariff cheating,” he said.

Hedge fund manager Bill Ackman slammed U.S. Commerce Secretary Howard Lutnick for not caring about the stock market and the economy falling. He is concerned about Trump’s tariffs. “I am frustrated to see what I believe is a major policy mistake happening after our country and the president have made great economic progress that is now threatened by tariffs,” he wrote in X.

Billionaire Elon Musk, Trump’s top adviser on the federal government overhaul, also expressed skepticism about tariffs. Musk said tariffs would raise costs for his electric carmaker Tesla. He said he hopes both Europe and the U.S. will move to zero tariffs, which would create a free-trade zone between Europe and North America.

According to Navarro, Musk does not understand the real situation. Musk only knows how to sell cars. "He is just protecting his own interests like any businessman would," he said. (REUTERS/AFP/AP)