China Hits Back Hard in Global Trade War With Levies on US Goods

Nations Ready to Retaliate Against US, Raising Global Recession Risks

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China announced additional tariffs of 34 percent on US goods on April 4, the most serious escalation in a trade war with President Donald Trump that has fed fears of a recession and triggered a global stock market rout.

In the stand-off between the world's top two economies, Beijing also announced controls on exports of some rare earths, and filed a complaint at the World Trade Organization.

It added 11 entities to the "unreliable entity" list, which allows Beijing to take punitive actions against foreign entities, including firms linked to arms sales to democratically governed Taiwan, which China claims as part of its territory.

Nations from Canada to China have readied retaliation in a mounting trade war after Mr. Trump raised US tariff barriers to their highest level in more than a century this week, leading to a plunge in world financial markets.

Investment bank JP Morgan said it now sees a 60 percent chance of the global economy entering recession by the year end, up from 40 percent previously.

US stock futures fell sharply on April 4, signaling more losses on Wall Street, after China retaliated with fresh tariffs a day after the Trump administration's sweeping levies knocked off US$2.4 trillion (S$3.2 trillion) from US equities.

"China comes out swinging with an aggressive response to Trump's tariffs," said Mr. Stephane Ekolo, a market and equity strategist with Tradition, in London.

"This is significant and is unlikely to be over, hence the negative market reactions. Investors are afraid of a 'tit-for-tat' trade war situation."