Kathmandu. US President Donald Trump on Thursday lifted tariffs on most countries, sending global markets into a tailspin. But he has moved ahead with a bitter trade war with China.
Stocks on Wall Street and across Asia rose sharply after Trump announced a 90-day moratorium on tariff increases for nearly all countries.
But Trump also said he had raised tariffs on China to 125 percent because of a “lack of respect.” Beijing has retaliated with 84 percent retaliatory tariffs on US imports, which took effect at noon (0401 GMT) on Thursday.
It is the latest blow to the growing standoff between the world’s two largest economies. Trump has refused to back down on the tariffs, telling reporters: “You have to be flexible.” “People were jumping out of line a little bit, they were yipping, they were getting a little scared,” Trump said. “Yippee” is a term used to describe nervousness in sports.
He said he was watching “very complicated” conditions in the crucial US bond market before making his decision. “I saw people getting a little nervous last night,” he said, “as U.S. bond yields rose during the U.S. stock sell-off—U.S. sovereign debt is generally seen as a safe haven for investors in times of crisis.”
Trump also predicted that trade deals would be made with all countries, including China, which has now refused to roll back retaliatory tariffs on U.S. goods. “There’s going to be a deal with China. They’re going to have a deal with each of them,” Trump said, “but the Chinese leaders don’t know how to go about it.” Trump also said he “cannot imagine” more tariffs than the Chinese tariffs.
As Beijing weighs the cost of further increases, Bloomberg reported that China’s top leadership will meet on Thursday to plan more stimulus to boost its already weak economy, which was already ailing from the trade war.
Markets were on a rollercoaster ride before a dramatic break on Wednesday after Trump announced global tariffs a week ago on “Liberation Day.” Trump imposed a 10 percent basic tariff on all countries that went into effect on Saturday. He has imposed high tariffs on major trading partners such as China and the European Union (EU).
They have been accused of cheating the United States. The tariffs went into effect on Wednesday. But as markets reeled again, Trump made a surprise announcement on his Truth social network that he had “authorized a 90-day grace period” on the higher tariffs, while the base rate would remain at 10 percent. He said the decision came after more than 75 countries reached out for talks and no retaliation.
Japan, which has imposed a 24 percent tariff under so-called reciprocal tariffs, welcomed the news but said it still “strongly” demanded that Washington reconsider other tariffs on its steel and auto exports.
The EU had earlier launched its own counterattack, announcing measures targeting some US products from next week in response to US tariffs on global steel and aluminium exports. The 27-nation bloc will hit more than 20 billion euros worth of US products, including soybeans, motorcycles and beauty products. But the EU notably did not retaliate against separate “Liberation Day” tariffs of 20 percent that went into effect on Wednesday.
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