United States and China exchange new tariffs and escalate global trade war
Trump raises tariffs to 125%, and China responds with equivalent rate; markets drop and economists warn of inflationary pressure
The global trade war between the United States and China entered a new chapter this week. Just hours after the U.S. imposed new punitive tariffs, the Chinese government responded with additional tariffs on American products.
The U.S. had initially imposed a 104% tariff on China, effective this Wednesday. However, the latest round of measures raised tariffs to 145%, now affecting nearly all of the country’s trading partners.
In retaliation, China’s Ministry of Finance announced that import tariffs on U.S. products will increase from 84% to 125%. The new rate will take effect this Saturday, the 12th, according to a statement by the Chinese Embassy in the U.S., as reported by Reuters.
Since the announcement of this latest round of tariffs, stock markets around the world have seen significant losses, reflecting growing tensions between the world’s two largest economies.
Despite the situation, U.S. inflation declined in March, reaching an annual rate of 2.4%, according to the Consumer Price Index (CPI) released on Thursday, the 10th. Among the items that recorded increases were personal care products.
“The full impact of the tariffs announced by the Trump administration has yet to be reflected in prices. The advance of tariffs and their potential pass-through to production chains are likely to put pressure on prices in the coming quarters, requiring caution from the Federal Reserve in conducting monetary policy”, said Marianna Costa, chief economist at Mirae Asset.
