China’s new tariffs on US goods to come into effect as Trump pauses measures for other countries – business live | Business
Key events
Australia rebuffs China’s appeal to 'join hands' in trade
Australia has rebuffed China’s appeal to “join hands” to defend trade on Thursday, as Beijing looks for partners to help it blunt US tariffs now ratcheted up to 125%, according to a report by Agence France-Presse.
Ambassador Xiao Qian urged Australia and other trading partners to “jointly respond to the changes of the world” in an opinion piece written for a Sydney newspaper.
“Under the new circumstances, China stands ready to join hands with Australia,” Xiao wrote for the Sydney Morning Herald.
But Australia’s defence minister Richard Marles was quick to pour cold water on notions of Canberra and Beijing uniting in “common cause”.
“We’re not about to make common cause with China, that’s not what’s going to happen here,” Marles told Australia’s Nine News.
“I don’t think we’ll be holding China’s hand.”
“We don’t want to see a trade war between America and China, to be clear, but our focus is on actually diversifying our trade.”
Tariffs a 'serious infringement' on all countries, China's commerce minister says
Hours before China’s reciprocal tariffs are to take effect, the country’s commerce minister has said the ‘reciprocal tariffs’ by the US are “a serious infringement of the legitimate interests of all countries”.
In a report in Chinese state media Xinhua, an official from the ministry was earlier quoted as saying that no one would win in a trade war.
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,” the official said on Wednesday.
In a stunning U-turn, Trump has reversed high tariffs on most nations – at least for 90 days. But the focus is now on China, the second-biggest provider of US imports, of which the pause does not apply.
Instead, Trump has raised tariffs on China to 125%, while China has announced new tariffs of 84% on all US imports, further escalating a high-stakes confrontation between the world’s two largest economies.
As our China correspondent Amy Hawkins writes in this insightful analysis, China is unlikely to blink first. One of the most helpful factors in Beijing’s favour is the fact that the US is far more dependent on Chinese imports than China is on the US.
For President Xi, there is only one politically viable response to Trump’s latest threat: Bring it on! Having already surprised domestic audiences with a forceful 34% reciprocal tariff, any appearance of backing down would be politically untenable,” says Diana Choyleva, founder and chief economist at Enodo Economics, a forecasting firm.”
Opening summary
Hello, and thanks for following our live coverage of what has been a tumultuous week on global markets, triggered by US President Trump’s shock tariff policy.
The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch the president’s attention.
Trump has now announced a 90-day pause on the proposed reciprocal tariffs for most countries, except China, whose tariffs he raised to 125% on Wednesday.
Asked about his stunning backtrack, Trump said: “I thought that people were jumping a little out line” and “getting a little bit afraid”.
If you are just getting up to speed, here is the latest on Trump tariffs.
Global markets surged after Trump announced his 90-day tariff pause. The S&P 500 surged 5.6%, while the Nasdaq has jumped over 8%. Trump’s Truth Social statement suggests he has backed down on tariffs on most countries for 90 days, applying instead a 10% tariff.
However, Trump’s pause does not apply to China, which hasannounced new tariffs of 84% on imports of all US goods, up from the 34% previously announced, hours after US tariffs on Chinese products went up to a staggering 104%. China’s retaliation sent stock markets falling further with major indices down in the UK, Germany, France and Spain.
China’s 84% tariffs on US imports will come into effect at 12.01pm on Thursday, according to Chinese state news agency, Xinhua.
The two countries 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.
Addressing reporters at the White House on Wednesday, 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.”
The WTO chief said the US-China tariff war could reduce trade in goods between the two economic giants by 80%, pulling down the rest of the world economy. Ngozi Okonjo-Iweala said that the US-China tariff war could reduce trade in goods between the two countries by 80%.
The EU announced 25% tariffs on a range of US imports in a first round of countermeasures. The 27-member bloc has agreed to impose retaliatory tariffs on €21bn (£18bn) of US goods, targeting farm produce and products from Republican states. All member states voted for the retaliation, with the exception of Hungary.
Trump’s 90-day pause on tariffs may not exempt the 25% tariff on cars, Ireland’s deputy prime minister has revealed,after a face-to-face meeting with US commerce secretary Howard Lutnick. Simon Harris, the first EU politician to meet anyone in Trump’s administration since the tariffs were announced last Wednesday, said he spoke to the European trade minister Maroš Šefčovič immediately after his bilateral meeting in Washington today.
Trump has in particular targeted the pharmaceutical industry, saying: “We’re going to put tariffs on the pharmaceutical companies, and they’re going to all want to come back.” It’s an idea he has raised before.
US markets recovered later on Wednesday after Bessent indicated America was open to trade agreementswith allies and a subsequent group deal with China. In his first comments since China’s 84% tariff announcement, Trump urged Americans to “be cool”. The US president bragged about countries “kissing my ass” to negotiate tariffs during a Tuesday-night dinner.
Stock markets soared after Donald Trump shelved plans to hike tariffs on most countries except China, unveiling a 90-day pause and pulling back from his global trade war after days of market turmoil and warnings of recession.
On Wall Street, the benchmark S&P 500 rallied by 9.5% – its biggest single-day increase since 2008.
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The Dow Jones industrial average jumped 7.9%. The technology-focused Nasdaq Composite climbed 12.2% – its best day since 2001 – as shares in tech giants like Apple and Nvidia surged.
After insisting for days that he would hold firm on his aggressive trade strategy, Trump announced that all countries that had not retaliated against US tariffs would receive a reprieve – and only face a blanket US tariff of 10% – until July.
Asked why he had ordered the pause, the US president told reporters: “People were jumping a little bit out of line. They were getting yippy.”
As Beijing prepared to slap punishing 84% tariffs on US goods from tomorrow, however, Trump said he would raise US tariffs on Chinese exports to 125% effective immediately.
