China and EU retaliate against US tariffs as trade war escalates

China will impose an 84 per cent tariff on US imports, as a trade war between the world’s largest economies escalated further.

It came as the European Union announced it would launch countermeasures, with the 27-nation bloc agreeing to put duties mostly of 25 per cent on a range of US imports from next week. 

Beijing said the new levy, a hike from its previous 34 per cent, would come into effect from Thursday, after Donald Trump began imposing 104 per cent tariffs on Chinese imports.

The EU agreed on a response after facing 25 per cent US import tariffs on steel, aluminium and cars, as well as broader tariffs of 20 per cent for other goods. 

Its package of measures, worth 12 billion Euros ($38.3 billion), will come into effect on April 15. 

Beijing also announced trade restrictions on 18 American companies, mostly in the defence sector.

World markets again lost ground as the trade war expanded. 

As China launched its latest trade play, US President Donald Trump took to his social media platform, Truth Social, to encourage businesses to move to America to avoid tariffs.

“This is a GREAT time to move your COMPANY into the United States of America,” Mr Trump said.

“ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!”

Speaking at an event in America, US Treasury Secretary Scott Bessent appeared to take aim at Spanish Prime Minister Pedro Sanchez, who told reporters this week that the EU should consider aligning more closely with China to counter the US tariff regime. 

Mr Bessent said such an approach would amount to Europe “cutting [its] own throat.”

“I think … at the end of the day that we can probably reach a deal with our allies, with the other countries that have been … good military allies and not perfect economic allies. And then we can approach China as a group,” Mr Bessent said.

He earlier told Fox Business Network that China’s tariff increase was a losing proposition for Beijing.

“I think it’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” he said.

He said allies had discussed with US officials how to rebalance China’s trade policies.

“That is the big win here. The US is trying to rebalance toward more manufacturing. China needs to rebalance towards more consumption,” he said.

He warned Beijing shouldn’t try to devalue its currency in response to US tariffs.

“If China starts devaluing, then that is a tax on the rest of the world and everyone will have to keep raising their tariffs to offset the devaluation. So I would urge them not to do that and to come to the table,” he said.

He didn’t rule out removing Chinese stocks from US exchanges, saying all options were being considered.

China has vowed to “fight to the end” in the trade war with the US.

“If the US truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit,” Ministry of Foreign Affairs spokesman, Lin Jian, said on Wednesday.

The EU, meanwhile, said it would suspend its tariffs “can be suspended at any time” if the US agreed a “fair and balanced negotiated outcome”.

“The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial,” a European Commission spokesman said.

China launches second WTO challenge

China’s commerce ministry announced it had lodged a new lawsuit against America’s 104 per cent tariff on Chinese goods, which came into effect on Tuesday, US time.

It launched its initial appeal with the WTO against America’s levy policy last week.

Beijing told the World Trade Organization (WTO) on Wednesday that US tariffs threatened 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 that was sent to Reuters.

“While China opposes trade wars, it will firmly defend its legitimate interests.”

The US’s tariff policy has wiped trillions of dollars from global markets since it was unveiled.

Despite the market chaos, President Trump has remained defiant, describing his tariff agenda as “permanent”.

He has also said he views tariffs as key to bringing countries from across the world to the negotiating table to review trade arrangements.

ABC/wires