Global stock markets have again plummeted after China confirmed it would retaliate against President Donald Trump with additional 34 percent tariffs on American goods, escalating a trade war that has rattled investors and fed fears of a coming recession.
Wall Street was down sharply on Friday following the Chinese response, which is set to be imposed from April 10, after the Trump administration’s sweeping levies knocked off $4 trillion ($US2.4 trillion) from US shares.
Trump said the response showed that Beijing had “panicked” after his administration announced a new 34% levy on Chinese goods last week, on top of an existing 20% duty on all imports from China.
UK Prime Minister Keir Starmer called Prime Minister Anthony Albanese and Italy’s Prime Minister Giorgia Meloni on Friday to discuss the potential fallout from the intensifying stand-off between the world’s two largest economies.
“They all agreed that an all-out trade war would be extremely damaging and is in nobody’s interests, while agreeing to keep in close contact in the coming days,” a spokesperson from Starmer’s office said.
The new measures also saw 11 US bodies added to China’s “unreliable entity list,” which allows it to impose punitive actions against foreign entities, including firms linked to arms sales to Taiwan, a self-governing island, which China claims as part of its territory.
The tit for tat comes after Trump declared a 10 per cent baseline tax on imports from all countries, as well as higher tariff rates on dozens of nations that run trade surpluses with the US.
Canada, which is America’s largest trading partner, has said it is preparing to hit the US with retaliatory tariffs, following a move by the Trump administration to increase levies on Canadian goods to their highest level in more than a century.
Experts have warned that the new trading climate, which is a stark departure from some of Trump’s more business-friendly campaign promises, could continue to rattle markets.
Investment bank JP Morgan said it sees a 60 per cent chance of the global economy entering recession by year-end, up from 40 per cent previously.
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