Donald Trump has threatened to impose a 10% tariff on Chinese-made goods arriving in the US from as early as 1 February, adding that he was also considering levies on imports from the EU. The warning came on his second day in office, as he ordered an investigation into US-China trade.
Trump said any penalties on Chinese goods would be “based on the fact that they’re sending fentanyl to Mexico and Canada”. He also criticised the EU, stating: “We have a $350bn deficit with the European Union. They treat us very, very badly, so they’re going to be in for tariffs.”
Despite the suggested 10% tariff being lower than the 60% he mentioned during the campaign, China’s currency and stock markets fell. The CSI 300 and Shanghai Composite indices closed nearly 1% lower, while Hong Kong’s Hang Seng index fell 1.8%. The offshore yuan also declined against the dollar.
Trump signed executive orders reversing Biden-era policies, including “Unleashing American Energy”, which paused disbursement of funds from the Inflation Reduction Act and bipartisan infrastructure law. This puts $300bn of green infrastructure spending at risk, according to US investors.
He also threatened to double tax rates for foreign nationals and companies in retaliation for “discriminatory” taxes on US firms abroad, and pulled out of the global minimum corporate tax deal. Meanwhile, Trump announced a $500bn AI infrastructure project, Stargate, a joint venture between OpenAI, Oracle and SoftBank.
All US federal employees working in diversity offices have been ordered on paid leave as Trump’s administration closes the programmes.
