China and the European Union (EU) have announced new retaliatory tariffs in response to US President Donald Trump's "Liberation Day" levies.
China announced on Wednesday a continued ratcheting up of the tit-for-tat tariffs, with another 84 per cent tax to be added on imports of US goods, matching additional tariffs imposed by US President Donald Trump earlier in the day.
This is an increase from the 34 per cent previously announced.
Beijing also imposed restrictions on 18 US companies, mostly in defence-related industries, adding to the 60 or so American firms punished over Mr Trump's tariffs.
"The US escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes of China's legitimate rights and interests and seriously undermines the rules-based multilateral trading system," China's finance ministry said in a statement.
Trump announces tarif pause, excludes China
Less than 14 hours after Mr Trump's "reciprocal tariffs" took effect on Wednesday, he announced a 90-day pause, reducing the higher-rate tariffs to 10 per cent for almost all countries.
All countries except China will now be subject to the same "baseline" 10 per cent tariff rate, rather than the additional rates announced by the president on what he dubbed "Liberation Day" last week.
In the same social media post announcing the pause, Mr Trump said he was again increasing the tariff on Chinese goods, this time to 125 per cent and effective immediately.
Citing a lack of respect, Mr Trump set China apart from other countries.
He said in a social media post that he is pausing his so-called "reciprocal tariffs" on many other trading partners because they had responded by reaching out for talks rather than retaliating.
The response from the Chinese government signals its determination not to bend to Mr Trump’s pressure, despite the risks.
"If the US insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end," China’s Ministry of Commerce said before announcing its latest tariff hike.
'No winners in a trade war'
Earlier on Wednesday, China released a white paper on US-China commercial ties in which it said Beijing did not deliberately pursue a trade surplus.
"The trade imbalance in goods between China and the US is both an inevitable result of structural issues in the US economy and a consequence of the comparative advantages and international division of labour between the two countries," the report said.
Chinese policymakers are backing themselves to go toe-to-toe with the Trump administration a second time.
"If the US insists on escalating trade restrictions, China has both the determination and the means to respond forcefully , and will do so," a commerce ministry spokesperson said in a statement accompanying the white paper's launch.
"There are no winners in a trade war. China does not want one, but the government will never allow the legitimate rights and interests of the Chinese people to be harmed or taken away."
EU to launch countermeasures
On Wednesday, the European Union also revealed 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.
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.
World markets again lost ground as the trade war expanded.
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 should not 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 did not 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 to 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
Meanwhile, China's commerce ministry has announced it had lodged a new lawsuit against America's new tariffs on Chinese goods.
It launched its initial appeal with the World Trade Organization (WTO) against America's levy policy last week.
Beijing told the 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, Mr Trump has remained defiant, describing his tariff agenda as "permanent".
He has also said he views tariffs are key to bringing countries from across the world to the negotiating table to review trade arrangements.
ABC/wires
