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    China imposes 84% levy on US goods

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    China will combat President Donald Trump’s latest tariff blitz by imposing 84% tariffs on U.S. goods starting Thursday, up from the 34% previously announced, the finance ministry said Wednesday.

    “If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” the Ministry of Commerce wrote in a document released Wednesday.

    Trump has rolled out a flurry of reciprocal levies on trading partners, including one sky-high fee: a tax on Chinese goods of 104%. This after implementing a sweeping tariffs plan that imposed 10% levies on almost all imports. Targeted U.S. tariffs of up to 50% on more than 50 nations went into effect Wednesday at 12:01 a.m.

    “It was a mistake for China to retaliate,” White House press secretary Karoline Leavitt said Tuesday. “When America is punched, (Trump) punches back harder, and that’s why there will be 104% tariffs going into effect on China.”

    The tariff turmoil has fueled fears of rampant inflation and a possible recession. U.S. stocks, which have been battered by losses in recent days, were mixed in early trading Wednesday while global stocks took another beating.

    Trump’s advisers have said about 70 nations have contacted the administration to open tariff talks. China on Tuesday refused to budge. The nation’s Commerce Ministry called the threat of escalation “a mistake on top of a mistake” and said: “China will never accept it.”

    Developments:

    ∎ China began sensoring some tariff information on social media. Hashtags and searches for “tariff” or “104” were mostly blocked on social media platform Weibo.

    ∎ European Union countries were expected to approve the bloc’s first countermeasures against U.S. tariffs, joining China and Canada in retaliating after reciprocal tariffs of 20% on select EU goods took effect.

    ∎ Oil prices fell to four-year lows Wednesday after China announced the additional tariff measures on U.S. goods.

    Treasury Secretary Scott Bessent dismissed China’s latest salvo in the tariff war as a “loser” move, telling Fox Business on Wednesday that the trade imbalance is so great that the 84% tariff on U.S. goods will have relatively little impact. 

    “Their exports to the U.S. are five times our exports to China,” Bessent said. “They can raise their tariffs, but so what?”

    Bessent also blasted China for failing to curb the flow of fentanyl into the U.S., an issue that Trump has repeatedly mentioned as he jacked up the tariff on Chinese goods.

    “Distributing drugs in China is punishable by death,” Bessent said. “Why don’t they apply the same standards to the people who are exporting these chemicals to the U.S.?” 

    The odds of the U.S. entering a recession are higher today than they were before the trade war began, many experts say. A group of eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), actually determine whether the economy has fallen into recession. 

    A recession is informally considered at least two straight quarters of declining economic output. But the technical definition is “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” according to NBER. The committee considers several factors including real income, payroll employment, consumer spending, industrial production and gross domestic product when making its determinations. 

    “Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” NBER explains on its website. 

    As the tariff war escalated, Trump again made a pitch for companies to open manufacturing plants in the U.S.

    “This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing,” Trump said in a Truth Social post. “ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!”

    In an earlier post, Trump described himself as “president for the workers, not the outsourcers; the President who stands up for Main Street, not Wall Street; who protects the middle class, not the political class; and who defends America, not trade cheaters all over the globe.”

    Billionaire Bill Ackman, a vocal supporter of Trump, pleaded for a third time Wednesday for the White House to rethink the trade war.

    “If the president doesn’t pause the effect of the tariffs soon, many small businesses will go bankrupt,” the influential hedge fund manager said in a post on X. “Medium-sized businesses will be next.”

    Ackman has been waging a public campaign to pause the policy for the past week as the market has taken significant hits since the Trump administration unleashed global tariffs on U.S. allies and adversaries. But thus far the president hasn’t indicated he will back off.

    “A 90-day pause will enable (Trump) to accomplish his objectives without destroying small businesses in the short term,” Ackman said Wednesday. “May cooler heads prevail.”

    Many wealthy and high-profile allies have spoken out against Trump’s global trade war, but there are still some who think waging it against China is the right move. Kevin O’Leary, known as “Mr. Wonderful” on the reality television series “Shark Tank,” is among them. He said China has never played by international trading rules, and that many voters may not like Trump’s style but that the president is standing up for American businesses and entrepreneurs who’ve had their intellectual property stolen.

    “This is not about tariffs anymore,” O’Leary said on CNN. “Nobody has taken on China yet. Not the Europeans, no administration for decades. As someone who actually does business there, I’ve had enough.”

    But Trump’s approval numbers are beginning to falter as Americans see their 401(k) plans suffer significant losses. A Reuters/Ipsos poll last week showed the president’s approval rating fell to 43%, down 4 points from a similar survey when he took office in January.

    Trump’s top economic adviser said Tuesday that he has put together a proposal outlining the countries that should receive priority for meetings amid requests for tariffs negotiations. National Economic Council Director Kevin Hassett told Fox News that Trump is prioritizing talks with America’s top allies and trading partners, such as South Korea and Japan. He spoke to the leaders of both nations this week.

    “There are a heck of a lot of concessions on the table,” Hassett said. “In the end, the president of course is going to be the one who decides whether the deal is good enough to change his mind about the tariffs.”

    Correction territory is generally understood to mean a stock market indicator has dropped at least 10% from its recent market high. This is different from bear market territory, which refers to a stock market drop of 20% or more from a recent peak, or a closing high. 

    Every investment is susceptible to corrections. They can apply to individual stocks, bonds, or stock indexes such as the Dow, S&P 500, and Nasdaq. 

    Several things can prompt a correction including a change in economic policy, newly released jobs or inflation data and company earnings reports.

    −Rachel Barber

    Contributing: Reuters

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