US-China trade war: Punishing tariff rates not sustainable

Last week, the threat of a US Treasury bond market blow-up forced US President Donald Trump to

“pause” many of his misnamed “reciprocal tariffs”

except the 10 per cent baseline duties on all countries. But after a series of tit-for-tat hikes, US tariffs on China have soared to 145 per cent, while China’s retaliatory tariffs on the US stand at 125 per cent. As the analyst Stephen Innes put it: “That’s not de-escalation, that’s targeted escalation.”

At 24 per cent, the average US weighted tariff is

still the highest

in over a century. In other words, the global trade war continues – and it is global because trade is driven by global supply chains of which China, as the world’s biggest manufacturer, is at the centre of many.