Tariff policy ‘doing really well’, says Trump, after China hits US with 125% tax

WASHINGTON – President Donald Trump insisted on April 11 that his tariff policy was “doing really well” despite China hiking tariffs on US goods to 125 per cent in a spiralling trade war between the world’s two biggest economies.

Investors dumped US government bonds, the dollar tumbled and stocks seesawed after Beijing’s retaliation deepened concerns on already traumatised global markets.

Mr Trump announced sweeping import taxes on dozens of trade partners last week,

only to abruptly roll them back

to 10 per cent on April 9 for 90 days – while raising tariffs on goods from China.

“We are doing really well on our tariff policy,” he said in a post on his Truth Social network after China announced its latest hike.

“Very exciting for America, and the World!!! It is moving along quickly,” he wrote.

The White House said later that Mr Trump remained “optimistic” about a deal with China, and added that 15 other countries have offers “on the table” during his 90-day pause in their tariffs.

But press secretary Karoline Leavitt added that “the President made it very clear, when the United States is punched, he will punch back harder”.

The US and Beijing have been trading salvos of increasingly harsh tariffs since last week.

President Xi Jinping gave his first major comments on the tensions on April 11, with state media quoting him as saying his country was “not afraid”.

He added that the European Union (EU) and China should “jointly resist unilateral bullying practices” during talks with Spain’s Prime Minister Pedro Sanchez.

Beijing announced after Mr Xi’s comments that new tariffs of 125 per cent on US goods would take effect on April 12 – almost matching

the 145 per cent level

imposed on Chinese goods coming into America.

A Chinese Commerce Ministry spokesperson said the US bore full responsibility, deriding Mr Trump’s tariffs as a “numbers game” that “will become a joke”.

But China’s finance ministry said tariffs would not go any higher in an acknowledgement that almost no imports are possible at the new level.

Mr Trump reiterated on April 10 that he was looking to do a deal with Mr Xi despite the mounting tensions.

“He’s been a friend of mine for a long period of time. I think that we’ll end up working out something that’s very good for both countries,” he told reporters.

But US officials have made it clear they expect Mr Xi to reach out first.

Pressure was growing on Mr Trump, however, as markets continued to fret.

Yields on crucial US government bonds, which are normally seen as a safe haven, were up again on April 11, indicating weaker demand as investors take fright.

The White House said, however, that it had no evidence to support speculation by traders that China was offloading some of its vast holdings – which increases the cost of borrowing for the US government – in retaliation.

Wall Street stocks finished higher on April 11, concluding a roller-coaster week on a positive note amid hopes that the market has absorbed the worst headlines about trade conflicts.

Policymakers at the US Federal Reserve, meanwhile, warned of higher inflation and slower growth ahead due to Mr Trump’s tariff policy.

Economists warn that the disruption in trade between the tightly integrated US and Chinese economies will increase prices for consumers and could spark a global recession.

Analyst Ipek Ozkardeskaya, of Swissquote bank, said the tariff figures were “so high that they don’t make sense anymore”, but noted that China was “now ready to go as far as needed”.

The rest of the world is still calibrating its response.

Mr Trump on April 10 described the EU – which was originally hit with 20 per cent tariffs – as “very smart” for refraining from retaliatory levies.

Top EU officials and Chinese leaders are set to hold their next summit marking 50 years of ties in China in July, Brussels announced. EU trade chief Maros Sefcovic will hold talks in Washington on April 14.

But the 27-nation bloc’s chief Ursula von der Leyen told the Financial Times on April 11 that it remained armed with a “wide range of countermeasures” including a possible hit on digital services that would strike US tech firms. AFP