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China announces 84% tariffs on US goods in showdown with Trump

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Hong Kong
CNN
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China unveiled retaliatory tariffs of 84% on imports of US goods on Wednesday, matching additional tariffs imposed by US President Donald Trump earlier in the day and further inflaming a trade war between the world’s two biggest economies.

Trump’s sweeping “reciprocal” tariffs took effect earlier on Wednesday. China was the hardest-hit nation, with a levy now totaling at least 104% on all its goods. The two countries have been involved in a game of tit-for-tat on trade, with Beijing standing firmly against each new tariff introduced by Washington.

The trade war widened further on Wednesday after the European Union announced it would begin collecting retaliatory duties on US imports starting Tuesday.

Announcing China’s response, the State Council Tariff Commission said in a statement: “The US escalation of tariffs on China is a mistake upon mistake, severely infringing upon China’s legitimate rights and interests, and seriously damaging the multilateral trading system based on rules.”

The amped-up retaliation comes after China repeatedly warned that it would “fight to the end” if the US moved forward with further tariffs.

On Wednesday, Trump’s additional levies on Chinese imports had originally been set to increase by 34 percentage points. But the president tacked on another 50 percentage points after Beijing refused to back down from the standoff. Prior to the most recent rounds of escalation, Trump had already imposed 20% levies on China.

The back-and-forth between the superpower economies has led to swings in stock markets globally, with Asian and European markets mostly lower and US stocks opening mixed.

“This is getting so ridiculous that it’s hard to believe it’s actually happening between the two largest economies that make up almost $50 trillion of global GDP, almost half of the world – let alone a tariff war against the whole world,” Peter Boockvar, chief investment officer of Bleakley Financial Group, wrote in a research note.

In addition to the increased tariff levy, China’s Ministry of Commerce imposed export controls on 12 American companies, barring Chinese companies from supplying them with dual-use items that have both military and civilian applications.

It also added six more US firms to its “unreliable entity list,” banning them from trading or making new investments in China, and filed a complaint to the World Trade Organization over the latest US tariffs.

US Treasury Secretary Scott Bessent has shrugged off China’s retaliatory moves, telling Fox Business on Wednesday that it is unfortunate that China does not “want to come and negotiate” a tariff deal. He called China the “worst offenders in the international trading system.”

“They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them … They’re the surplus country,” Bessent said. China’s “exports to the US are five times our exports to China. So, they can raise their tariffs. But so what?”

The EU announcement on Wednesday was in response to a sharp increase in US tariffs on all imports of steel and aluminum, unveiled last month.

“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” the European Commission said.

As Trump escalated his tariff war, the message from the Chinese government, state media and opinion leaders alike has been one of defiance, voicing their determination to strike back while leaving the door open for negotiation.

Shortly after the latest round kicked in on Wednesday, a Chinese Foreign Ministry spokesperson told reporters that the US needed to “demonstrate an attitude of equality, respect and mutual benefit” if it truly wanted to resolve the trade war through dialogue.

China also released a white paper on its trade and economic ties with the US, saying that relations had been damaged by the “unilateral and protectionist measures” taken by Washington.

In a written Q&A about the white paper, an unnamed Commerce Ministry official emphasized that China does not want a trade war, but said Beijing would “never sit idly by” while the legitimate rights and interests of the Chinese people are “harmed or stripped away.”

Despite the defiant tone and calibrated confidence, China is bracing for impact to its export sector, which has been a bright spot in its otherwise slowing economy. Last year, trade between the US and China totaled roughly half a trillion dollars.

“If the US insists on further escalating trade restrictions, China has the firm will and ample tools to take resolute countermeasures — and will see it through to the end,” said the official.

The successive rounds of tariffs come as China has reveled in a feeling of greater economic vitality following years of grappling with a crisis in the property sector, high local government debt and the fallout from Beijing’s pandemic controls.

Last month, the Chinese government announced a slew of measures to rev up domestic consumption as it anticipated the impact of Trump’s trade policy on its export-powered growth.

This story has been updated with additional reporting and context.



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Europe

Trump finds kindred European spirit in Meloni

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Washington
CNN
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It took Italy’s Prime Minister Giorgia Meloni exactly two sentences in the Oval Office on Thursday to signal to her host she was a kindred spirit.

“We both share another fight, which is the fight against the woke and DEI ideology that would like to erase our history,” she proclaimed in English, using some of President Donald Trump’s favorite codewords to describe her battle against what they see as progressive ideals run amok.

It was an unsubtle attempt to make clear from the get-go she was not the kind of European leader Trump has hosted in the same room over the course of the past two months.

Populist, conservative and a shrewd political operator, Meloni has captured the attention of Trump and his advisers. She was the lone leader from Europe to attend his inauguration in January. She is friends with his most powerful adviser, billionaire Elon Musk. And she has adopted the same type of anti-migration stance that helped fuel Trump’s return to the White House.

Like El Salvador’s President Nayib Bukele, another likeminded ally who visited the White House this week, Meloni appeared to know exactly what to say to convey her MAGA bonafides.

“The goal for me is to make the West great again,” she said. “And I think we can do it together.”

Whether that is Trump’s ambition is another question. Europe is hardly a major priority for Trump. To the extent he is paying attention — on trade and the war in Ukraine — he’s been harshly critical, suggesting the continent has spent the last several decades conniving to “screw” the United States.

Still, having a leader in Rome who shares his hostility toward liberal ideals amounts to a convenient opening for Trump at a moment when transatlantic ties have strained to their breaking point.

Unlike the actual leader of the European Commission, Ursula von der Leyen — who, despite repeated attempts, hasn’t secured a meeting or conversation with Trump since he took office, according to European officials — Meloni is a national leader who was elected, in part, based on her far-right platform.

And while officials in Joe Biden’s administration voiced pleasant surprise at Meloni’s staunch support for Ukraine and praised her stewardship of the Group of 7 last year, she is not regarded by Trump as having been overly close to his immediate predecessor — something some of Trump’s aides say has hampered von der Leyen’s attempts to cultivate Trump.

Ahead of her visit, one Trump aide described Meloni as a conduit for Europe who could act as an intermediary for the rest of the continent.

“We certainly see her as a valuable interlocutor with the EU,” the official said.

Meloni herself said before arriving in Washington she well understood the expectations for her visit.

“I am aware of what I represent, and I am aware of what I am defending,” she said, joking that she felt zero pressure from the high stakes.

At least in their public engagements, there is little more Meloni could have asked for in terms of accolades from Trump.

“Everybody loves her and respects her,” Trump said as their meeting was getting underway. “I can’t say that about many people.”

That may be an overstatement — her opponents in Italy accuse her of duplicity in currying favor with both Washington and Brussels — but at least in Trump’s mind, Meloni’s ability to maintain relations both with European leaders and with himself is a major feat.

Unlike France’s Emmanuel Macron, Britain’s Keir Starmer or Ukraine’s Volodymyr Zelensky — whose own Oval Office visit in February ended in cacophonous disaster — Meloni wasn’t at the White House to convince the president to adopt a certain course when it comes to Ukraine or to try correcting his views of European financial support.

When Trump began laying into Zelensky during their meeting on Thursday, declaring himself “not a big fan” of the Ukrainian president, Meloni chose not to intervene.

And while she described Russian President Vladimir Putin as l’invasore — the invader — while answering a question in Italian about who was responsible for the war, she cut off her interpreter mid-sentence before the statement could be read aloud in English for Trump to hear.

“I will do that,” she told the translator, going on to recount in English what she’d just said about raising Italy’s defense spending, but skipping over her answer on Putin.

Meloni coordinated closely with von der Leyen before traveling to Washington, according to European officials, and maintains close relationships with her counterparts in Paris, London and Berlin. Yet her power to secure relief from the 20% tariff Trump has threatened on the EU is limited; any new trade deal would have to be negotiated between Washington and EU officials in Brussels.

So far, those officials have gained little clarity on what Trump is looking for in a new agreement, and it wasn’t obvious that Meloni was departing Washington with any new insights.

Still, Trump was optimistic a trade agreement could be reached — “there’ll be a trade deal, 100%,” he said as he sat down for lunch — which was at least a glimmer of hope for avoiding a transatlantic trade war.

On both trade and defense, Meloni’s Italy is not exactly what Trump is looking for from Europe. Its trade surplus with the United States runs about $45 billion as Americans buy up Chianti, parmesan cheese and Gucci bags. And it currently spends only about 1.5% of its domestic output on defense, well below the 2% target set by NATO.

Ordinarily, both would be areas ripe for an angry lecture from Trump. But he glossed over those irritants at the White House, treating Meloni only with respect.

“I would say that she has taken Europe by storm,” he said glowingly.

He even accepted her invitation to visit Rome for a meeting with other Europeans.



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US, Ukraine and European officials hold ‘excellent exchange’ in Paris, in highest level talks in weeks

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CNN
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US Secretary of State Marco Rubio and Steve Witkoff, President Donald Trump’s international envoy, held high level talks with Ukrainian and European officials in Paris at a summit Thursday aimed at bolstering Ukraine’s defenses against Russia’s unrelenting invasion.

Ukrainian and US officials had an “excellent exchange” with their British, French and German counterparts, an Elysée source said following the talks, with the meetings in Paris providing “a very strong strategic opportunity.”

Ukraine and the three European countries stressed their shared support for Trump’s efforts to bring about a rapid end to the war, according to the source.

More meetings will take place next week in London in the same format, the source added. State Department spokesperson Tammy Bruce would not say whether Rubio would attend the discussions.

French President Emmanuel Macron said Thursday’s talks marked “a day of diplomatic mobilisation,” in a post on social media.

“Today, we engaged in a positive and constructive discussion on how to achieve both a ceasefire and a comprehensive, lasting peace,” Macron said.

Zelensky thanked Macron for his leadership and for the work in Paris by representatives from the attending countries, in a post on social media.

“It is important that we hear each other, refine and clarify our positions, and work for the sake of real security of Ukraine and all (of) our Europe,” he said.

Elsewhere, Trump told reporters Thursday that the United States would be “hearing” from Russia “this week” on the US proposal for a ceasefire between Russia and Ukraine.

“We’re going to be hearing from them this week, very shortly, actually, and we’ll see. But we want it to stop. We want the death and the killing to stop,” the president told reporters in the Oval Office.

Trump added that while he is not a “big fan” of Zelensky, he does not hold the Ukrainian leader responsible for the war.

“I don’t hold Zelensky responsible, but I’m not exactly thrilled with the fact that that war started. That was a war that would have never started if I were president,” Trump told reporters.

If Trump’s pledge to end the war in a day was far-fetched, the hope to secure a full truce by Easter – this weekend – also looks likely to fail. Russia has ramped up its strikes on Ukraine in recent weeks, despite Washington’s overtures to Moscow.

For Ukraine’s European allies, the summit offered a chance to gauge the Trump administration’s thinking on the war in Ukraine. Kyiv and its allies have been alarmed by Trump’s and Witkoff’s parroting of Kremlin talking points, and may have viewed the talks as a chance to disrupt and dislodge those perceptions.

After meeting Russian President Vladimir Putin for a third time last week, Witkoff told Fox News that any peace deal in Ukraine will center on the “so-called five territories,” referring to Crimea, the Ukrainian peninsula Russia annexed in 2014, and the four mainland Ukrainian regions Russia has occupied since its full-scale invasion in 2022, having previously suggested Ukraine may have to cede them under a truce.

Oleksandr Merezhko, a member of Ukraine’s parliament, told CNN Tuesday that Witkoff “with all due respect… may be inadvertently trying to push pro-Russian narratives.”

Despite its ambitious pledges, the Trump administration has struggled to broker a lasting peace deal between the warring countries, and has been accused of using mostly sticks in its dealing with Ukraine while saving its carrots for Russia.

After the White House briefly cut weapons supplies and intelligence sharing to Ukraine in March, Kyiv swiftly agreed to the US proposal for a 30-day ceasefire.

Following separate talks with Russian and Ukrainian officials later that month, the White House said both had agreed to the ceasefire on energy infrastructure and in the Black Sea – only for the Kremlin to announce it would only implement the agreement when sanctions imposed on its banks and exports are lifted.

The Center for Countering Disinformation, a Ukrainian think-tank, has pointed out that the supposed truce has done little to constrain Russia’s aggression. In the 22 days after the truce, the Russian army killed nearly 2.5 times more Ukrainians than during the same period before it was announced, the Center said in an update Tuesday.

In a sign of growing irritation with Moscow, Trump last week said that “Russia has to get moving,” but provided no deadlines or ultimatum if it did not.

While the Paris summit was underway, Kirill Dmitriev, a top Russian negotiator, claimed that many countries are trying to “disrupt” Russia’s dialogue with the US. He said Putin’s latest meeting with Witkoff was “extremely productive,” but that the dialogue was taking place in “very difficult conditions – constant attacks, constant disinformation.”



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European Central Bank cuts interest rates as tariffs threaten the economy

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London
CNN
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The European Central Bank cut its main interest rate by a quarter of a percentage point Thursday, citing growing trade tensions after US President Donald Trump’s tariffs sparked a global trade war.

While the 20 countries that use the euro have built up “resilience against global shocks,” the “outlook for (economic) growth has deteriorated owing to rising trade tensions,” the ECB said in a statement.

The central bank is one of a number of global economic and financial players to warn that tariffs could weigh on economies and hurt everyone from major corporations to regular people. Similar warnings have been issued by the International Monetary Fund, the World Trade Organization, US Federal Reserve Chair Jerome Powell and others.

Speaking to reporters, ECB President Christine Lagarde said: “Disruptions to international commerce, financial market tensions and geopolitical uncertainty are weighing on business investment. As consumers become more cautious about the future, they may pull back on spending.”

The ECB’s rate cut to 2.25%, which was widely expected, is the seventh in the past year.

Yael Selfin, chief economist at consultancy KPMG, said the trade war – which has featured a flurry of tariffs, pauses, new tariffs and more delays – could lead to a pile-up of products as trade flows get snarled.

“The outfall of the trade disruptions could create a global glut of manufactured goods, which could see goods prices fall into deflationary territory this year,” Selfin added.

In contrast to the ECB, the US Federal Reserve held rates steady at its most recent policy meeting in March, and officials, including Chair Jerome Powell, have hinted that trade uncertainty will keep rates on hold awhile longer.

On Wednesday, Powell told a Chicago audience that Trump’s moves represent “very fundamental policy changes” and gave his starkest warning to date on the effect of tariffs on the US economy, the world’s largest.

Trump contrasted the approach of the two central banks on social media Thursday, ripping into Powell for holding rates.

“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’” Trump wrote. “Powell’s termination cannot come fast enough!”

But Lagarde, in her press conference Thursday, rallied behind Powell: “I have a lot of respect for my esteemed colleague and friend Jay Powell.”

She added that it is imperative that central banks stay independent of government influence or intervention, noting that any country that wants to join the eurozone must demonstrate that it can uphold that independence in law and in practice.

“For us, here, the independence of central banks is fundamental,” she said.

This story has been updated with additional information and context.



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