The trade conflict between China and the United States took a dramatic turn this Monday with the confirmation of a significant escalation in tariffs on Chinese imports by the White House.
According to a report, the White House press secretary announced that the additional 104% tariffs would take effect tomorrow at noon, Eastern time, because China had not withdrawn its retaliatory tariffs.
This increase in import duties follows a previous warning from President Donald Trump to impose punitive measures if Beijing did not cut its 34% tariffs, which prompted a response from Beijing that considerably raises tensions in a trade dispute already affecting global markets.
China's Ministry of Commerce called the measure "an error on top of an error" and vowed to "fight to the end." This reaction reflects China's stance against the United States' trade policies, which have drastically increased tariffs on Chinese products in an attempt to reduce the United States' trade deficit.
Financial markets reacted immediately to the news. Cryptocurrencies took a major hit in their performance, with Bitcoin being the most affected, reaching USD 76,000 and Ethereum plunging below USD 1500.
This market volatility reflects the growing fear that the trade conflict could turn into a full-blown trade war triggered by China, which could lead to a policy-driven recession.
Treasury Secretary Scott Bessent warned on Tuesday that China made "a big mistake" with its retaliatory tariffs on American products, pointing out that the United States is the country with the trade deficit.
According to Bessent, "we are the deficit country. So, what do we lose if China raises its tariffs on us? We export one-fifth of what they export to us, so they have a losing hand."
This assessment underscores the asymmetry in the trade relationship between the two countries, where China relies more on its exports to the United States than vice versa.
