Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
Donald Trump has threatened to hit China with an additional 50 per cent tariff from Tuesday and vowed to press ahead with a trade war that has triggered a sharp market sell-off and fears of a global recession.
The president’s comments came on a day of acute tumult on global equity markets, as Asian shares tumbled and Wall Street’s blue-chip S&P 500 index swung in a huge range.
Trump on Monday said he would ratchet up levies on China within hours unless Beijing scrapped the retaliatory tariff it announced on US goods last week.
“If that tariff isn’t removed by tomorrow at 12 o’clock, we’re putting a 50 per cent tariff on above the tariffs that we put on,” he said. “They’ve become a rich country . . . I have great respect for China, but they can’t do this.”
The additional US levy would bring its duties on Chinese imports to more than 120 per cent — hitting goods from iPhones to clothing, and marking a major new offensive in Trump’s trade war.
Beijing announced a 34 per cent tariff on American imports last Friday, two days after Trump put an equivalent level of duties on imports from China during his “liberation day” announcements last week.
The president’s latest threats came during a day of volatile market trading, as investors struggled to parse mixed signals from the White House about its openness to negotiations, including with China.
The S&P 500 closed down 0.2 per cent, after wild swings based on a false report that Trump had decided to pause his new planned tariff regime for 90 days. The index has shed more than $5tn since he shocked the US’s trading partners with universal tariffs and so-called “reciprocal” levies, triggering warnings from Wall Street banks of faster inflation and slower economic growth — or outright recession.
Oil and other commodities were also hit again on Monday, while European stocks fell sharply, with the Stoxx Europe 600 index sinking 4.5 per cent and the FTSE 100 down 4.4 per cent.
Asian shares were pummelled, with Hong Kong’s Hang Seng index down more than 13 per cent, its worst single-day fall this century, as traders priced in the China-US stand-off.
In his comments during a joint press conference with Israel’s leader Benjamin Netanyahu on Monday, Trump offered some hints about potential deals — but stepped up his warnings to other countries too.
“There can be permanent tariffs and there can also be negotiations, because there are things that we need beyond tariffs,” Trump said.
“We’re going to get fair deals and good deals with every country, and if we don’t, we’re going to have nothing to do with them, they’re not going to be allowed to participate in the United States.”
White House officials have repeatedly indicated in recent days that Trump’s priority is to drive down the US’s trade deficit, not strike new deals.
“This is not a negotiation,” wrote Trump’s trade adviser Peter Navarro in an article for the Financial Times on Monday. He added the US wanted countries also to fix the “bigger threat” of “non-tariff barriers that continue to choke America industries”.
But National Economic Council director Kevin Hassett on Monday said the White House was in touch with 50 countries that were seeking trade deals.
Trump wrote on his social media platform Truth Social on Monday morning that talks with other countries “will begin taking place immediately”.
He later said he had spoken with Japan’s Prime Minister Shigeru Ishiba. Treasury secretary Scott Bessent said Trump had asked him and US trade representative Jamieson Greer to lead new negotiations with Tokyo.
Netanyahu and US commerce secretary Howard Lutnick also on Sunday discussed the new tariff Trump imposed on imports from Israel.
“Countries that really took advantage of us are now saying ‘please negotiate,’ Trump said. “We’re going to have to reset the table on trade. And when we do, we’re going to come out unbelievably well.”
