China will ignore the United States if it continues engaging in what it calls a “tariff numbers game”, the Chinese foreign ministry has stated, following the White House’s breakdown of tariffs on Chinese goods that could reach as high as 245% due to China’s retaliatory moves, reports RTE.
A factsheet released earlier this week by the White House detailed that China faces a total duty burden including a 125% retaliatory tariff, a 20% tariff aimed at tackling the fentanyl crisis, and a range of tariffs from 7.5% to 100% on selected items in response to unfair trade behavior.
Two weeks ago, US President Donald Trump imposed new tariffs on all nations, but then unexpectedly scaled back the higher “reciprocal tariffs” for many countries—while maintaining strict duties on China, reports RTE.
In return, China raised its own tariffs on US imports and has avoided resuming negotiations, asserting that any discussions must be grounded in equality and mutual respect.
At the same time, several countries have started to explore direct trade agreements with the United States.
China also lodged a fresh complaint with the World Trade Organisation last week, stating its “grave concern” over the US tariffs and accusing the US of breaching WTO rules, reports RTE.
This week, China made a surprise move by replacing its top trade negotiator, naming Li Chenggang—its representative to the WTO—as successor to Wang Shouwen, who previously led its trade talks.
The US has indicated that President Trump remains open to striking a trade deal with China, but insists that Beijing must make the first move, reports RTE.
Meanwhile, anxiety has increased around Mr Trump’s aggressive tariff strategy, with the Federal Reserve chair warning of inflation and “volatility”, even as the president’s mention of “progress” in Japan trade talks gave markets a modest lift.
President Trump is hoping his tariff strategy will eventually yield favorable trade agreements that lower foreign trade barriers and prompt manufacturers to shift operations back to the US.
However, these negotiations—including the most recent meeting with Japan—are playing out amidst intensifying tension with China and broader fears over economic upheaval, reports RTE.
Federal Reserve Chairman Jerome Powell said yesterday that tariffs are “highly likely” to trigger short-term inflation and might even cause “more persistent” price increases.
He also highlighted “volatility” in financial markets during this “time of high uncertainty.”
This sentiment impacted Wall Street significantly, with the Nasdaq falling more than 4%, the S&P over 3%, and the Dow Jones losing more than 2% at one stage, reports RTE.
Chip giant Nvidia briefly fell more than 10% after revealing large losses tied to new US export rules limiting semiconductor shipments to China.
World Bank President Ajay Banga echoed Powell’s comments, stating that “uncertainty and volatility are undoubtedly contributing to a more cautious economic and business environment.”
WTO Director-General Ngozi Okonjo-Iweala warned the current uncertainty “threatens to act as a brake on global growth, with severe negative consequences for the world, the most vulnerable economies in particular,” reports RTE.
After meeting Japan’s trade representative, Mr Trump shared on his Truth Social account that there had been “big progress”.
Yet following Ryosei Akazawa’s discussions with Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, it became apparent that no substantial breakthrough was achieved, reports RTE.
“Of course, the discussions going forward won’t be easy, but President Trump has expressed his desire to give the negotiations with Japan the highest priority,” Prime Minister Shigeru Ishiba said in Tokyo, reports RTE.
“We recognise that this round of talks has created a foundation for the next steps, and we appreciate that,” Mr Ishiba said, reports RTE.
But he added: “Of course there is a gap between Japan and the US.”
Japan remains the top foreign investor in the United States and serves as a key ally for Washington in the Asia-Pacific region.
Despite this, Japan still faces the 10% baseline tariffs Mr Trump has applied to most countries, in addition to steep duties on cars, steel, and aluminum, reports RTE.
Reports suggest Mr Trump is urging Japan to increase purchases of US defense products and to help strengthen the yen against the dollar.
Mr Akazawa confirmed that the latter issue was not brought up in the discussions.
Elsewhere, Indonesian officials were also in Washington for talks yesterday. South Korea’s finance minister, representing a leading semiconductor and auto exporting nation, is scheduled to meet Mr Bessent next week, reports RTE.
Although tariff policies remain popular among Republican voters, they pose potential political risks for Mr Trump domestically.
California Governor Gavin Newsom, a Democrat, announced a new legal challenge to Mr Trump’s “authority to unilaterally enact tariffs, which have created economic chaos, driven up prices, and harmed the state, families, and businesses,” reports RTE.
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