Trump tariffs live: China announces fresh 84% levy on US goods in latest trade war escalation

The FTSE 100 slumped even further around midday on Wednesday after China announced 84 per cent retaliatory trade tariffs on US imports.

London’s blue-chip index fell as far as 3.6 per cent, or 289 points, to 7621, before paring back the losses slightly.

Germany’s Dax was down 3.5 per cent while France’s Cac 40 was down 3.6 per cent shortly after the announcement.

Up until now, China’s response to Donald Trump’s eye-watering 104 per cent tariffs had been “measured, moderate and commensurate”, said Dylan Loh, author and assistant professor at Singapore’s Nanyang Technological University.

Loh was speaking to The Independent shortly before China announced it was upping its own counter-tariffs from 34 to 84 per cent on Wednesday afternoon.

Beyond tariffs, China has a number of ways it can respond to Mr Trump, both “economic and non-economic”, he says. “There are still a slew of policy options. China could, for instance, go after services, which is immense. They could expand the lists of critical minerals banned, or target the agricultural industry in the US,” Mr Loh said.

The full impact on global trade will depend on how the tariff war plays out, he says, but “this blow to the existing economic order, which the US underwrote, in terms of trading rules and norms is very heavy”.

“This will weigh heavily on global exporters and American importers. This will dampen economic investments and companies and consumers will pre-emptively tighten their belts.

“China could redouble efforts to spur domestic consumption, he said. “If China can undertake domestic economic/social reforms to truly unlock domestic consumption, they wouldn’t need to export as much as they do today.”

China told the World Trade Organization on Wednesday that the United States’ decision to impose what it has called reciprocal tariffs on Beijing threatens to further destabilise global trade.

“The situation has dangerously escalated. As one of the affected members, China expresses grave concern and firm opposition to this reckless move,” China said in a statement to the WTO on Wednesday that was sent to Reuters by the Chinese mission to the WTO.

U.S. President Donald Trump’s “reciprocal” tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods, as the European Union prepared retaliatory measures, escalating a global trade war.

China told a WTO meeting on trade in goods that the reciprocal tariffs violated the organisation’s rules and undermined the multilateral trading system.

“Reciprocal tariff is not – and will never be – a cure for trade imbalances. Instead, they will backfire, harming the U.S. itself,” China’s statement to the WTO said.

China will impose 84 per cent tariffs on U.S. goods from Thursday, up from the 34 per cent previously announced, the finance ministry said on Wednesday.

German conservatives under Friedrich Merz agreed a coalition deal with the centre-left Social Democrats (SPD) on Wednesday, aiming to revive growth in Europe’s largest economy just as a global trade war threatens recession.

The deal caps weeks of haggling between chancellor-in-waiting Merz and the SPD after he topped elections in February but fell well short of a majority, with the far-right Alternative for Germany surging into second place.

Pressure to reach a deal has taken on new urgency as the government will take charge at a time of global turbulence in an escalating trade conflict sparked by U.S. President Donald Trump’s sweeping import tariffs.

The conservative CDU-CSU bloc and the SPD will present their agreement to form a new government at 3:00 p.m. (1300 GMT), the CSU party said.

Merz, who called Trump’s U.S. an unreliable ally, has already vowed to build up defence spending as Europe faces a hostile Russia, and to support businesses struggling with high costs and weak demand.

Chancellor Rachel Reeves has repeated that “all options” remain on the table over the future of British Steel, as fears mount over the company’s plant in Scunthorpe.

“This government recognises the importance of those jobs in Scunthorpe and in the local area, and we’re doing everything we can to preserve those jobs and to support those communities,” she said.

“We’re in conversation both with the owners and with the trade unions to find a deal.”

It comes after Sir Keir Starmer said all options remained on the table amid suggestions the UK could nationalise the company.

British Steel has launched a consultation on the proposed closure of blast furnaces at its Scunthorpe plant and the Government has been talking to the company’s Chinese owner Jingye.

There have been calls for temporary nationalisation amid fears of thousands of job losses.

Britain does not need to lower food standards or accept concessions in a trade deal with the US, Kemi Badenoch has said, but instead must strive for “mutual gain”.

During a local elections visit to Worcestershire, the Conservative leader was asked whether she would accept chlorinated chicken into the UK or abolish a tax on big tech companies if she were negotiating a deal with the US.

Ms Badenoch, a former business secretary, replied: “Trade deals are not about tit for tat and giving things away. They are about gaining on both sides.

“I am a former trade secretary. I signed the biggest trade deal we did since Brexit, the Trans-Pacific Partnership. We didn’t have to lower our food standards and where countries did ask us to lower food standards, like Canada, I said no to changing the trade deal we had existing with them.”

She added: “So, we don’t need to do things like that. We need to look at where there are opportunities. You look at mutual gain, recognising mutual professional qualification, bringing tariffs right down.

“This is what Keir Starmer needs to do. My worry is that he can sign a trade deal that just gets us back to where we were last week. What we actually need is a trade deal that is going to be for the future, not the past.”

The chancellor met chief executives from banking and investment first in the Treasury this morning, vowing to shield “working people” from the impact of Donald Trump’s tariffs.

At the meeting were Lloyds chief executive Charlie Nunn, Hargreaves Lansdown boss Dan Olley and other business leaders.

Ms Reeves promised to build closer ties with non-US allies to boost trade, while Britain seeks to hammer out a deal with the Trump administration to lower or lift tariffs on Britain.

Following the meeting, a Treasury spokesman said: “This morning, the Chancellor and Economic Secretary met with key players across the industry promoting the UK as a place to invest given our stable political climate, our ongoing reforms to our capital markets and our commitment to bolstering the UK’s retail investment culture and delivering growth under our Plan for Change.”

“They are dying to make a deal – ‘please sir make a deal, I’ll do anything, I’ll do anything sir’,” he said.

Read the full article here: