China reacts to the increase in Trump’s rates and to recession of the sounds of turbulence

China has increased its rates on US imports on Friday at 125%, reviving the decision of the President of the United States Donald Trump to increase rates on Chinese products at 145% and intensifying bets on a commercial war that threatens to put an end to global supply chains.

In the meantime, the turbulence triggered by the Trump rates has shown a few signs of softening on Friday, with the markets that fall and foreign leaders ask themselves how to react to the largest disorder of the world commercial order for decades.

A short relief to the actions after Trump decided to pause the taxes of countries of countries for 90 days have dispelled quickly, carefully to the climb of the commercial war with China, which fueled the fears of the global recession.

Global actions have decreased, the dollar has been eliminated and the sale of titles of the US government accelerated on Friday, rekindling the fears of fragility in the largest world title market. Gold, a safe refuge for investors in times of crisis, has reached the maximum recording of the discharge.

“The risk of recession is much, much bigger now than a few weeks ago,” said Adam Hetts, head of the multiatine of Janus Henderson.

The U.S. Treasury Secretary Scott Besent tried to calm the skeptics saying on Thursday during a cabinet meeting that over 75 countries want to start commercial negotiations. Trump himself expressed the expectation of an agreement with China, the second largest economy in the world.

But the uncertainty, meanwhile, has expanded some of the most volatile negotiations since the first days of the Covid-19 pandemic.

The Asian indices, for the most part, followed the fall of Wall Street. In Europe, the latest increase in rates China caused the fall of the shares, leaving the Stoxx 600 with a drop of over 1% on the day and on the road for a loss more loss this week, one of the most volatile ever recorded.

Bessent has ignored the new turbulence of the market on Thursday and said that agreements with other countries will bring security.

The United States and Vietnam have agreed to start formal commercial negotiations, said the White House. The manufacturing center of the South -East Asia is ready to repress Chinese products that are sent to the United States through its territory hoping to avoid rates, said Reuters exclusively.

In the meantime, Japanese Prime Minister Shigeru Ishiba has created a commercial task force waiting to visit Washington next week.

According to China?

Since Trump suddenly suspended his “mutual” rates on other hours after their entry into force this week, has increased rates on Chinese imports as punishment from the initial retaliation of Beijing.

He has imposed new rates on Chinese products of 145% since he entered office, he said an authority of the White House.

On Friday China was avenged with new rates.

“The US imposition of abnormally high rates on China seriously violates the rules of international and economic trade, the basic economic laws and common sense, as well as being an intimidation and totally unilateral coercion,” said the Ministry of Finance China in a note.

Trump told journalists to the White House Thursday who thinks that the United States can make an agreement with China and said that he respects the Chinese president Xi Jinping.

“In a real sense, he was my friend for a long time and I think we will end up working on something that is very good for both countries,” he said.

XI, in his first public comments on the Trump rates, told the Spanish Prime Minister Pedro Sánchez during a match of Beijing on Friday that China and the European Union should “oppose jointly to unilateral intimidation acts,” said the Chinese state news agency Xinhua.

“There are no winners in a commercial war,” said the Chinese leader to his guest, adding that, reciting together, the second largest economy in the world and the European commercial bloc of 27 countries can help maintain “global order based on the rules”.

European authorities estimate that the impact of US rates on the region’s economy will be 0.5% to 1.0% of GDP. Considering that the EU economy as a whole should grow 0.9% this year, according to the European Central Bank, the US rates could bring the EU to the recession.

(Text by John Geddie and Ingrid Melander)

Source: Terra

Rose

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