China Responds to US Tariffs Amid Global Market Decline

China Responds to US Tariffs:Global financial markets experienced a dramatic loss of $5 trillion in value this week after US President Donald Trump implemented significant tariffs on Chinese goods. The tariffs sparked immediate retaliation from China, causing widespread economic instability.

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On Friday, Trump increased tariffs on Chinese imports by 34%, bringing the total US tariffs on Chinese goods to 54% this year. This decision also ended the duty-free allowance for low-value Chinese imports. Additionally, a new 10% “baseline” tariff on all global imports was introduced, with even higher rates expected in the coming weeks.

China Responds to US Tariffs with Immediate Retaliation

China Responds to US Tariffs by imposing equivalent tariffs and export controls on crucial materials, such as rare earths. In a statement on Facebook, Chinese foreign ministry spokesperson Guo Jiakun remarked, “The market has spoken,” highlighting the significant impact on global markets and advocating for “equal-footed consultation.”

Market Reactions to US Tariffs

The market’s reaction was immediate and severe. The S&P 500 fell by 9% during the week, marking its worst decline since the pandemic. Oil and commodity prices dropped sharply, and investors turned to government bonds for safety.US Customs began collecting the new 10% tariffs on Saturday, with no grace period for new cargo. However, shipments already in transit have until May 27 to arrive tariff-free.

Further Tariff Increases and Global Impact

The US plans to impose higher “reciprocal” tariffs up to 50% starting next week. These will impact EU imports with 20% duties and Chinese goods with 34%. Meanwhile, Vietnam has agreed to initiate trade talks, while Canada and Mexico were excluded from the latest round of tariffs.

Impact on Industries and Global Trade

The new tariffs are already causing concern across various industries. Chinese trade bodies warn of rising inflation and an increased risk of recession in the US. The French cognac industry, which exports $1.1 billion worth of products to the US annually, is feeling the effects. With new 20% tariffs in place, producers like Jean Fillioux are now considering uprooting vineyards and finding new markets.

As the US and China continue their tariff war, the global economy faces immense pressure. Economists fear that these trade tensions could harm global growth, pushing vulnerable industries to the brink. In response, China is urging the US to return to negotiations and end what it considers “wrong actions.”

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