Shortly after China declared an 84% retaliatory tariff on American goods, U.S. Treasury Secretary Scott Bessent described Beijing’s move as “unfortunate” during an interview with Fox Business Network. He urged China not to resort to currency devaluation as a means to counter the tariffs, instead calling for negotiations.
Bessent also emphasized the need for China to take action against those exporting fentanyl precursors to the U.S., an issue repeatedly raised by former President Donald Trump. Fentanyl has been a contentious point in U.S.-China relations, with Trump accusing Beijing of failing to curb its exports. In response, China claimed that the U.S. was using the issue as a justification for imposing higher tariffs, with its foreign minister labeling the tactic as “blackmail.”
Additionally, Bessent reportedly suggested that U.S. allies should consider strategies to “rebalance China.”
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China’s finance ministry recently announced a sharp increase in tariffs on all U.S. goods, raising them from 34% to 84%, effective April 10. In a white paper on trade relations, China’s Commerce Ministry warned that if the U.S. continues to escalate economic and trade restrictions, Beijing is prepared to take “necessary countermeasures” and “fight to the end.”
As part of its response, China also placed 12 U.S. entities on its export control list and designated six more as “unreliable entities.” Furthermore, Beijing lodged a new complaint with the World Trade Organization (WTO) against additional U.S. tariffs, according to the Chinese mission to the WTO.
Following China’s announcement, U.S. stock index futures experienced a sharp decline. Investor confidence eroded as hopes for concessions faded, leading to sell-offs in stocks, industrial commodities, and even government bonds. By 07:21 AM (local time), Dow E-minis had dropped 517 points (1.37%), S&P 500 E-minis fell 1.21% to 4,959.75, and Nasdaq 100 E-minis declined by 183.75 points (1.07%), as reported by Reuters.
Peter Andersen, founder of Andersen Capital Management, commented on the market reaction, likening the tariff dispute to a high-stakes game of “chicken,” where both nations are continually escalating trade barriers. He noted that the stock market has shown a direct correlation between tariff-related news and market fluctuations.
Since Trump announced broad reciprocal tariffs last week, the S&P 500 has lost more than $5.83 trillion in market value.
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