13 April,2025 07:35 AM IST | Beijing/London | Agencies
Analysts warn that the ongoing tit-for-tat tariffs could severely curtail trade between the world’s two largest economies. Representational pic/iStock
Beijing raised its tariffs on US imports to 125 per cent on Friday, in retaliation against President Donald Trump's move to hike duties on Chinese goods. The escalation has deepened a trade war that threatens to destabilise global supply chains.
The countermeasures have intensified the economic upheaval triggered by Trump's tariffs. US stocks ended a volatile week higher, but the safe haven of gold hit a record high during the session and benchmark US 10-year government bond yields posted their biggest weekly increase since 2001 alongside a slump in the dollar, signalling a lack of confidence in America Inc.
A US consumer survey revealed that inflation concerns have climbed to their highest level since 1981, and financial institutions are increasingly warning of a heightened risk of recession.
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Trump, however, is downplaying the market volatility. He predicted a rebound in the dollar and characterised his 10 per cent across-the-board tariffs represented a floor in most cases as countries strike their own trade deals with Washington. "When people understand what we're doing, I think the dollar will go way up," he told reporters aboard Air Force One late on Friday. "The bond market's going good. It had a little moment but I solved that problem very quickly."
The $29 trillion Treasury market experienced sharp sell-offs after Trump's initial announcement of what he has described as reciprocal tariffs.
Democrats are quick to say that President Donald Trump's tariffs are terrible. But they are also stressing that they are not inherently anti-tariff. What Trump's political opponents say they really dislike is the "chaos" he has unleashed. "Tariffs are an important tool in our economic toolbox," said Senator Elizabeth Warren, District of Massachusetts "But Trump is creating chaos, and that undercuts our economy."
The Trump administration says electronics like smart phones and laptops will be excluded from reciprocal tariffs, a move that could help keep prices down for popular consumer electronics that aren't usually made in the US. The announcement would also benefit big tech companies like Apple and Samsung. The US Customs and Border Protection said items used to make semiconductors and flat-panel monitors would be exempt.
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