Trump tariffs: US to charge 145% on Chinese goods

The US stock market plummeted again Thursday amid concerns over Donald Trump's threat of tariffs that have stoked fears of a global recession and trade wars.

Trump's mooted tariffs against most of the US' trading partners had sent markets tumbling, but his sudden about-face on Wednesday had caused stocks to surge.

Europe and Asia also rebounded on Thursday in the wake of Trump's announcement that massive so-called "reciprocal" tariffs would be paused for 90 days. 

But those hopes were dealt a blow on Thursday, as all three major Wall Street indices spent the entire session in the red amid continuing investor uncertainty.

The S&P 500 finished 3.5% down, at 5,268.05, after surging 9.5% on Wednesday.

The economic turmoil caused by Trump's unpredictable tariff policies has also caused oil prices to tumble, while the dollar fell by more than 2% compared to the euro.
 

US President Donald Trump said the European Union was "very smart" in avoiding retaliation on US tariffs.

"They were very smart. They were ready to announce retaliation. And then they heard about what we did with respect to China... and they said, you know, 'We're going to hold back a little bit,'" Trump told reporters during a White House cabinet meeting.

The remarks come after the EU said it would put its trade retaliation measures on hold for 90 days, leaving room for a negotiated
solution.

"We want to give negotiations a chance," EU chief Ursula von der Leyen said in a statement, adding that "if negotiations are not satisfactory, our countermeasures will kick in."

During a cabinet meeting at the White House, Trump said there will be a "transition cost" due to his tariff policy.

"There will be a transition cost and transition problems," Trump said. "But in the end it's going to be a beautiful thing."

Although Trump has suspended elevated levies on many countries, the president has still imposed a 10% baseline tariff rate on most US trading partners. Trump has also imposed a 145% rate on Chinese goods amid a trade war between the world's two biggest economies.  

Although Trump believes tariffs will bring jobs back to the United States from foreign countries, many economists say the tariffs will make the costs of everyday goods more expensive for US consumers. 

The Trump administration contends that the tariffs are a negotiating tool, with White House National Economic Council Director Kevin Hassett telling US broadcaster Fox News that the administration has "offers on the table from more than 15 countries." 

However, even a 10% baseline tariff could make everyday life more expensive for consumers as the White House negotiates deals. If costs rise further, it could sour the public's view of the Trump administration and impact his Republican Party during next year's midterm congressional election.   

European Commission President Ursula von der Leyen spoke by phone with UAE President Sheikh Mohamed bin Zayed Al Nahyan regarding trade on Thursday.

The two leaders "agreed to launch negotiations on a free trade agreement," the EU said in a statement regarding the "cordial" call. 

"Von der Leyen emphasized the European Union's strong track record of delivering high-standard trade agreements and building partnerships  based on open trade and mutual benefit," the EU readout added. 

 The UAE is a member of the Gulf Cooperation Council, which also consists of Bahrain, Saudi Arabia, Oman, Qatar and Kuwait.

The EU is the second largest trading partner of the GCC, with Europe exporting machinery, chemical products and other items to the Gulf Arab nations. Meanwhile, the EU imports mineral fuels and manufactured goods from the GCC.  

The EU is looking to deepen its trading ties with other partners, as the US threatens tariffs and makes other demands.  

US Treasury Secretary Scott Bessent said the US and Vietnam will begun formal trade talks.

Bessent had spoken with Vietnamese Deputy Prime Minister Duc Phoc. 

Trump had earlier imposed a 46% levy on Vietnam, before pausing its implementation for 90 days. 

"During their talks, Secretary Bessent emphasized the importance of continued engagement with trade partners, and the need for quick, demonstrable progress to resolve outstanding issues," a statement from the Treasury Department said. 

Vietnam is a major exporter to the US. Textiles and footwear are some of those exports, with Vietnam also shipping Samsung phones to the world's biggest economy. 

The White House clarified that Chinese imports will be tariffed at 145%, not the 125% rate that US President Donald Trump's had written about in his posting on Truth Social.

The 125%  did not include a pre-existing tariff of 20% from earlier in the year over China's alleged role in the fentanyl supply chain.

This takes the total tariffs Trump has imposed on Chinese products this year to 145%.

Wall Street reacted immediately with the S&P 500 losing 5%, more than half its prior gain.  

Top leaders at the central banks of Spain and France on Thursday said that US President Donald Trump's careening tariff policies are creating "maximum uncertainty" in global markets.

The head of supervision at the Bank of Spain, Mercedes Olano, said of US policy — "There is maximum uncertainty, vigilance on the part of all supervisors, not only of the Bank of Spain but also of the SSM [ECB Single Supervisory Mechanism], and we are continuously monitoring potential impact the various tariffs could have on the global financial system."

Francois Villeroy de Galhau — governor of the Bank of France and a key policy advisor to the European Central Bank (ECB) as a member of its governing council — described Donald Trump's latest policy swerve as "less bad news than before" but said uncertainty was threatening trust and growth.   

Villeroy de Galhau claimed Trump's recent policy actions had weakened confidence in the US dollar before adding, "Thank god that Europe created the Euro." The banker said the currency, created 25 years, gave the bloc "monetary autonomy" by allowing the ECB to set its own policies, independent from those of the US. 

China said on Thursday it will "moderately reduce" the number of Hollywood films it imports in retaliation for US President Donald Trump's tariffs on Chinese imports.

In view of the size of the Chinese film market, the world's second-largest, the move will be a blow to Hollywood studios despite the fact that China imports just 10 US films a year.

"The wrong action of the US government's indiscriminate tariffs on China is bound to further reduce the favorable impression of domestic audiences on American films," a statement from the National Film Administration said.

"We will follow market rules, respect the audience's choices, and moderately reduce the number of American films imported," it said.

Hollywood blockbusters often do well at the Chinese box office. 

Warner Bros and Legendary's "A Minecraft Movie" took the top spot last weekend, with ticket sales of around $14.5 million (€13.1 million), according to the Hollywood Reporter. 

German economic institutes on Thursday lowered their growth forecast for 2025 to 0.1%from the already dire 0.8% predicted in September, with US tariffs on steel, aluminum and cars playing a major role in the contraction of Europe's biggest economy.

The institutes said that the further "reciprocal" US tariffs that have now been suspended for 90 days could possibly double the negative effects, with the German economy heavily dependent on exports

Germany could thus be set for a third year of recession for the first time since World War II. It is the only G7 economy to have contracted for the last two years.

You can read more on the forecast here.

The European Union is pausing its retaliatory tariffs on US imports for 90 days after US President Donald Trump's suspension of the heavy trade levies he recently announced on dozens of countries, European Commission President Ursula von der Leyen said on Thursday.

"We took note of the announcement by President Trump. We want to give negotiations a chance. While finalizing the adoption of the EU countermeasures that saw strong support from our member states, we will put them on hold for 90 days," she said.

"If negotiations are not satisfactory, our countermeasures will kick in," she added.

The bloc had imposed counter-tariffs on about €21 billion ($23 billion) of US imports to take effect next Tuesday in response to Trump's 25% levies on imports of steel and aluminum from the EU.

The counter-tariffs were to have been rolled out in three phases till December, affecting US products including steel and aluminum, rice, soybeans, almonds and other foodstuffs, along with lawn mowers, vacuum cleaners and toilet paper.

Bourbon whiskey was dropped from the initial list after threats from Trump of a 200% tariff on alcoholic beverages from the EU.

EU responses to earlier US tariffs on the European car industry and the 20% general levies that went into force on Wednesday before they were suspended are still being assessed.

European stock markets surged in early trading on Thursday after US President Donald Trump precipitously paused swingeing tariffs on most countries, leaving only a 10% baseline trade levy.

Germany's leading index, the DAX, jumped 8.2% to 21,291.15 points at opening after the suspension of Trump's envisaged 20% tariffs on EU goods. 

Paris went up 7.3% to 7,362.06 and London jumped 5.3% to 8,089.72.

The rebound follows a drop of around 3% on Wednesday after Trump's tariffs went into effect.

"While there has been understandable relief ... the genie is still out of the bottle on policy unpredictability," according  to an analysis from Germany's Deutsche Bank.

Above all the German economy could be negatively affected by the ongoing US-China trade war, where both sides have been imposing tit-for-tat tariffs in a seemingly endless upward spiral.

China has called on the United States on Thursday to meet it "halfway" as a trade war between the world's two top economies gains momentum, but promised to "fight to the end" if no compromise can be reached.

"The door to dialogue is open, but it must be based on mutual respect and conducted in an equal manner," Commerce Ministry spokeswoman He Yongqian told a regular press briefing.

The use of pressure, threats and blackmail was not the right way to deal with China, He said.

She warned that US tariffs on international trading partners would "severely impact the stability of the global economic order."

China would continue to resolutely safeguard its sovereignty, security and development interests, she said.

China's Foreign Ministry also warned that the US tariffs were harmful to the whole world.

The tariffs "seriously damage the rules-based multilateral trading system, and seriously impact the stability of the global economic order," Foreign Ministry spokesman Lin Jian said.

"This is a blatant act that goes against the will of the world and goes against the whole world," he added.

 

European Commission President Ursula von der Leyen on Thursday welcomed US President Donald Trump's decision to pause for 90 days the hefty trade duties he had imposed on most countries.

Von der Leyen said the US president's latest decision was an "important step" in stabilizing the global economy, which has been thrown into considerable disarray by the US' recent trade moves.

"Clear, predictable conditions are essential for trade and supply chains to function," she said.

"The European Union remains committed to constructive negotiations with the United States, with the goal of achieving frictionless and mutually beneficial trade."

Trump's decision on Wednesday to pause the tariffs came after EU member states — except Hungary — approved retaliatory tariffs on €20.9 billion ($23 billion) in US goods as a response to previous tariffs imposed by Trump on imports of steel and aluminum from the bloc.

The EU says it is still working on countermeasures against separate US tariffs of 20% on European car imports.

No response has yet been formulated to Trump's 20% tariffs on imports from the EU that went into force on Wednesday before their rapid suspension.

Members of the 27-country bloc on Wednesday again said they would prefer a negotiated deal to settle trade issues, describing the US tariffs as "unjustified and damaging." 

China is continuing to seek adequate responses as it remains the target of massive US trade tariffs despite US President Donald Trump's turnaround decision on Wednesday to pause the hefty levies he had just imposed on dozens of other countries.

Trump has raised the tariff on Chinese imports to the US to 125%, up from the 104% levy that went into force on Wednesday.

Beijing, in its turn, may well once more up the 84% tariffs it applied to US imports on Wednesday in retaliation to Trump's initial move.

It has vowed to "fight to the end" in the trade war that is rapidly escalating between the world's two top economies.

China says it has held talks with the European Union and Malaysia on enhancing trade ties in response to the friction with the US.

It also said it had filed a protest with the World Trade Organization (WTO), complaining of "bullying" tactics by the Trump administration.

According to the Reuters news agency, Chinese firms that use US technology company Amazon to sell products are also preparing to either raise their prices for the US or leave the market.

Trump, who says he raised the tariffs on Chinese imports in response to China's "lack of respect" for global markets, has insisted that a trade agreement will be reached with Beijing.

"A deal's going to be made with China," Trump said, while adding that China's leaders "don't quite know how to go about it."

China is the second biggest provider of imports to the US after Mexico.

After US President Donald Trump's 90-day reprieve of sweeping tarrifs Wednesday afternoon, major stock indicies in the US surged as investors piled back into equities.

The White House said that Trump's "pause" means that the "tariff level will be brought down to a universal 10% tariff."

Tariffs on Chinese imports, however, have not been offered such respite, as Trump said Wednesday afternoon he was raising duties on Chinese imports to 125% in response to China slapping its own levies of 84% on US goods earlier in the day. 

Despite the escalating tit-for-tat tariffs, Trump predicted "a deal's going to be made with China." 

Markets Thursday have shown a mixed response. Asian markets surged, making up for record losses earlier in the week. US futures were mostly flat on Thursday morning. 

Uncertainty also remains over how the Trump administration will respond to EU measures targeting €20 billion (roughly €18 billion) worth of US products announced yesterday in retaliation for American duties on global steel and aluminum exports.