“It was a mistake for China to retaliate,” said White House press chief Carolyn Leavitt.
President Donald Trump’s 104% tariff on China and a higher mutual tax on dozens of other countries came into effect at 12:01am
In February, Trump imposed a 10% tariff on Beijing over fentanyl. A few weeks later, he doubled the import duties to 20%. During the much-anticipated April 2nd “American Wealth Again” event, the president announced a 34% mutual tariff on all Chinese imports.
Overall, the Chinese administration’s US tariff rate is 104%.
Beijing announced it would retaliate with Tit-for-Tat tariffs and other punitive trade measures. After Trump’s threat, Chinese officials confirmed they would not retreat.
“It was a mistake for China to retaliate against the president. He came back stronger when America was punched,” White House spokesman Caroline Leavitt told reporters on April 8.
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She added that if Trump reached out to China to make a deal, “He would be incredibly elegant, but he would do his best for the Americans.”
Trade escalations affect around $600 billion in US-China trade annually, but authorities say the trade deficit needs to be reduced.
Treasury Secretary Scott Bescent called China’s decision “a big mistake.”
The president initially established a 30% tariff rate for packages under $800 starting May 2nd. However, the new rate will be 90% on June 1st.
Until this year, the so-called De Minimis package was exempt from tariffs, benefiting Chinese online retail giants Shayne and Temu.
Higher mutual tariffs
Meanwhile, mutual tariffs from other countries ranging from 11% to 50% have also been enforced.
Last week, the president released a comprehensive list of nations (advanced economy and developing markets) that face higher collections, a plan based on non-monetary trade barriers, whether it is currency manipulation or industrial subsidies.
“For decades, our country has been plundered, plundered and plundered by both our friends and our enemies nearby,” Trump said in his April 2 speech.
“Foreign leaders have stole our work, foreign con artists have plundered our factories, foreign scavengers have ripped apart the once beautiful American dreams.”
Prior to the April 9 implementation, dozens of countries contacted the US and launched trade negotiations, officials say.
Appearing before a Senate Finance Committee hearing on April 9, US trade representative Jamieson Greer told lawmakers “nearly 50 countries have personally approached me, discussing the president’s new policies and exploring ways to achieve mutual relations.”
Bessent also told Fox Business Network that 70 countries have contacted the administration to pursue a new trade agreement.
US Trade Representative candidate Jamieson Greer will testify before the Senate Finance Committee on February 6, 2025 at Capitol Hill, Washington. Madalina Vasiliu/The Epoch Times
Kevin Hassett, director of the National Economic Council, said in an interview with Fox News that managing the numerous demands of trade negotiations is materially challenging. The White House will prioritize trade talks with other countries, but he noted that Trump will first negotiate with Japan and South Korea.
“In the end, the president will, of course, be the one who will decide whether it’s enough to change his mind about tariffs,” Hassett said.
Recently there has been uncertainty about whether the president will pursue trade talks.
For example, White House trade advisor Peter Navarro recently declared that tariffs were not negotiable.
In a true social post last week, Trump confirmed to Lam, the general secretary of the Communist Party of Vietnam, that he proposed to reduce tariffs on US goods to zero percent.
At the same time, the president considers both to be true at the same time. Tariffs can be enacted and negotiations may occur.
“There are many countries that are coming to negotiate a deal with us,” Trump told reporters in his oval office with Israeli Prime Minister Benjamin Netanyahu. “They’re going to be fair deals and in certain cases they’ll pay a fair amount of duties.”
Markets are braces for tariff effects
U.S. stock futures fell ahead of new tariffs, with major benchmarks down on average by more than 1%.
The government bond market remained the same. The benchmark 10-year Treasury Ministry has been fixed at over 4.3%, keeping the sharp decline in the past few sessions.
Crude oil prices continued to fall, knocking around 4% to under $58 per barrel in overnight trading on New York’s commercial exchanges.
Without a framework to monitor current tariff-driven market conditions, stocks could remain extremely volatile, according to Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.
“It’s important to remember that this is a fluid news cycle that’s moving very quickly. The tariff stories can literally change at any time,” Tentarelli said in a memo emailed to the Epoch Times.
Still, he added that rising prices and lower growth rates are of great concern among investors.
Tariffs are generating headlines, but market watchers continue to monitor difficult economic data.
Producer prices for March will also be released on April 11th. Early estimates predict a jump of 0.2%, with core producer prices likely to rise by 0.3%.
The Fed will release minutes from last month’s Federal Open Market Committee (FOMC) policy meeting on April 9th. The summary of the document could highlight the surprises of civil servants surrounding tariffs and the potential impact on the dual duties of institutional price stability and maximum employment.
“Taxes are very likely to generate at least a temporary increase in inflation, but the impact could also be more sustained,” Federal Reserve Chairman Jerome Powell said at a meeting of business journalists on April 4.
