China, EU hit back as US tariffs kick in

BEIJING HIKES LEVIES TO 84% AS XI PLEDGES TO STRENGTHEN TIES WITH NEIGHBOURS. EU VOTES TO IMPOSE 25% TARIFF IN FIRST ROUND OF COUNTERMEASURES. SHRUGGING OFF MARKET ROUT, US PRESIDENT SAYS 'BE COOL!'

- REUTERS

China and the European Union announced new trade barriers on US goods on Wednesday in response to steep duties imposed by US President Donald Trump, escalating a global trade war that has hammered markets and raised the likelihood of recession.

China announced a tariff hike on US imports to 84 per cent from 34 per cent, shortly after Trump's punitive 104 per cent tariffs on Chinese imports kicked in on Wednesday, as a standoff between the world's two largest economies showed no signs of resolution.

The EU said it would impose 25 per cent tariffs on a range of US imports in a first round of countermeasures. The 27-member bloc faces US tariffs of 20 per cent on most products and higher duties on autos and steel.

Targeted US duties on dozens of other countries, from Japan to Madagascar, also took effect, the latest in a thicket of tariffs that are unwinding a global trading order that has been in place for decades.

Tariffs in the world's largest consumer market now average above 20 per cent, according to various estimates, up from 2.5 per cent before Trump took office.

JPMorgan Chase CEO Jamie Dimon, a prominent voice on economic matters, said Trump's tariffs would probably lead to a recession and defaults by borrowers.