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The U.S. has hit one of its largest trading partners with steep new levees in an escalation of its trade war. The import tax on Chinese goods is now at least 104%. Most Asian markets fell as the latest round of President Trump's tariffs took effect just after midnight.
A MARTÍNEZ, HOST:
And China has swiftly retaliated by increasing its levies on U.S. goods to 84%, up from 34%. The European Union, meanwhile, approved its first set of retaliatory tariffs. The bloc plans to impose duties of 25% on a range of U.S. imports starting next week. U.S. markets are swinging between small gains and losses in early trading. We're going now to NPR international correspondent John Ruwitch in Beijing. So, John, what more can you tell us about Beijing's reaction?
JOHN RUWITCH, BYLINE: Yeah. Beijing really came out swinging today, once again, as it had promised. As you say, you know, China announced that it was adding a 50% tariff on top of its other tariffs on U.S. imports, matching Trump's latest two escalations step for step. This takes the base tariff rate on U.S. imports into China up to 84%. Now, that's different than the base rate on U.S. - base U.S. rate on Chinese imports to the U.S., which is 104%.
And that's because Trump imposed 20% tariffs earlier in the year and China responded differently. Since then, though, it's taken the gloves off. Here's foreign ministry spokesman Lin Jian speaking through an interpreter earlier today.
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LIN JIAN: (Through interpreter) We will not let anyone take away the Chinese people's legitimate right to development. We will not tolerate any attempt to harm China's sovereignty, security and development interests. We will continue to take resolute and strong measures to safeguard our legitimate rights and interests.
RUWITCH: So in addition to the tariffs that were announced today, Beijing, once again, blacklisted a handful of U.S. companies, putting them on export control lists or unreliable entity lists.
MARTÍNEZ: Other countries are choosing to negotiate or offer concessions. Why is China taking this path?
RUWITCH: Well, China's casting this whole thing in kind of stark black-and-white terms. It's essentially right versus wrong. Beijing projects itself as a champion of free and fair trade now and of multilateralism. And it accuses the U.S. of engaging in selfish and irresponsible protectionism, even blackmail, in this case. You know, President Trump said yesterday, China wants to make a deal and he's waiting for them to call.
Well, China's leadership is also flagged that it's willing to negotiate, but not under duress. The foreign ministry spokesman, Lin Jian, said the U.S. must adopt an attitude of equality, mutual benefit and respect. I mean, ultimately, I think the Chinese leadership believes that China can tough it out and that in the long run, this trade war is going to damage the U.S. more than China.
It's worth noting, of course, that China isn't the only country taking the path of retaliation. The European Union is planning to put sanctions on a range of U.S. goods, from steel to nonalcoholic beer.
MARTÍNEZ: You said China believes it can tough it out, but with tariffs in these ranges, these numbers, I mean, it's going to be painful.
RUWITCH: Yes. There absolutely will be pain from these tariffs and from the retaliation, you know? And that, actually, is sort of the point, according to Guo Shan, who is a partner at the Beijing-based research firm Hutong Research. She says tariffs are basically so high now that meaningful negotiations are impossible until one side or the other cries uncle and caves.
GUO SHAN: It's a strategy - escalate to de-escalate.
RUWITCH: Escalate to de-escalate is what's happening. She says Beijing has been preparing for this since the first trade war back in 2018 and the leadership's confident. You know, China's been doubling down on policies to strengthen its self-sufficiency. Policymakers feel like they have a lot of ammunition for economic stimulus, if they should need it. The currency's been allowed to weaken, the government's been propping up share prices, etc., etc.
So China's been expanding its trade also with diplomatic - and diplomatic relations with other countries.
MARTÍNEZ: What other reactions have we seen outside of China?
RUWITCH: Well, Asian stocks fell sharply today. U.S. stock futures were also down after Beijing announced its retaliatory tariffs. Some governments in the region are trying to position their economies to cushion the blow. India, for instance, cut benchmark interest rates today. Governments haven't said a whole lot. They're working quietly, trying to negotiate to get these tariffs lowered or dropped.
MARTÍNEZ: That's NPR's John Ruwitch in Beijing. John, thanks.
RUWITCH: You bet. Transcript provided by NPR, Copyright NPR.
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