China intensifies trade war with US by hiking tariffs to 125%
This tit-for-tat escalation has intensified tensions between the world's two largest economies, with significant implications for global markets and supply chains.
In addition to the tariff hike, China has implemented several countermeasures:
- Initiated antitrust investigations into major US companies, including DuPont and Google.
- Reduced imports of Hollywood films.
- Imposed export controls on strategic minerals.
- Filed a complaint with the World Trade Organization (WTO).
- Issued travel advisories for Chinese citizens travelling to the US.
The escalating US-China trade war has triggered significant market volatility. The US dollar weakened against major global currencies, reflecting investor unease. Meanwhile, gold prices surged to a record $3,223.72 per ounce, as markets turned to traditional safe-haven assets amid growing uncertainty. Analysts warn that continued tensions could further destabilise global financial systems in the weeks ahead.
The international community has expressed concern over the escalating trade tensions, as European leaders, including French President Emmanuel Macron and European Commission President Ursula von der Leyen, have called for strong negotiation stances and are preparing retaliatory measures.
Economists warn that the trade war could lead to a global GDP shrinkage of 0.7% and a 7% drop in trade.