Trump threatens China with an additional 50% tariff

WashingtonUS President Donald Trump has threatened China with an additional 50% tariff if the Asian country does not back down from its trade retaliation. Last week, the US president announced a 34% tariff on Chinese imports, which, added to the existing 20% tariffs, already threatens to amount to a tax of around 54% on products from the Asian giant. China's response had been to respond to the new tariffs with a similar tax (34%) on US imports.

"If China does not back down on its 34% increase by tomorrow, April 8th, the United States will impose additional 50% tariffs on China, which will take effect on April 9th," the tycoon wrote this morning on Truth Social. Trump is managing the tariff conflict with a vengeance. post on social media, and this Monday he has not stopped posting demanding that the Federal Reserve cut interest rates and defending his trade commitment despite the collapse of the stock market indices. The threat to China comes after Trump gave TikTok an additional 75 days to allow the Chinese parent company to sell its subsidiary to US companies and thus avoid being blocked throughout the country.

Later, White House economic adviser Stephen Miran encouraged other countries to make counteroffers to Trump to avoid the reciprocal tariffs going into effect next Wednesday, April 9. However, Miran has clarified that he cannot confirm whether it will be possible to reach an agreement before the tariffs are implemented.

Wall Street remains in the red, and some major investors like Stan Durckenmiller and Bill Ackmann have begun to openly complain about Trump's tariffs. But the tycoon remains firm in his trade commitment. "The United States has the opportunity to do something that should have been done decades ago. Don't be weak! Don't be stupid! Don't panic!" he posted on Truth Social this Monday, after spending the long weekend playing golf. Most of the statements these days weren't about the tariff fire but about the tycoon's progress on the holes in the course.

While downplaying the stock market panic, Trump has once again called on the Federal Reserve (the Fed, the US central bank) to lower interest rates, that is, to make money cheaper. He also attacked China for its response to the US tariff hike and accused the Asian giant of being "the biggest abuser" of the US. In another post on Truth Social, the US president argued that the tariffs introduced allow "billions of dollars a week" to enter the US government.

"Oil prices are down, interest rates are down (the slow-moving Fed should cut them!), food prices are down, there is no inflation, and the long-abused US is still bringing in billions of dollars a week from the abusive countries. China, whose markets are collapsing, just raised its tariffs by 34%. All this on top of their ridiculously high long-term tariffs (and more!), ignoring my warning to the abusive countries not to retaliate," the president stated. At the last meeting, the Fed decided to opt for prudence and keep interest rates around 5.3%.

The US president insists on lowering interest rates so that, theoretically, lowering the price of money makes borrowing from banks cheaper and boosts consumption. The measure also devalues the dollar, making US exports cheaper and making it more attractive for US companies that have relocated their production to move factories back to the country. One of Trump's goals is to reindustrialize the US and get companies to produce in the US again. However, the downside to lowering the price of money is that, in a context of high inflation (as is the case), the measure can worsen the situation. Another downside to lowering the price of money is that it makes investment in the US less attractive for foreign investors.

Wall Street is witnessing a Black Monday. The day opened with a drop of 1,200 points. The instability Trump has caused in the markets is such that this morning the stock market seemed to calm down in the face of rumors that the president was considering declaring a 90-day truce—with the exception of China—but when the White House came out to deny it, it turned red again.

The one who had spoken of a 90-day truce was the billionaire investor Ackman in a post on X: "I have a lot of respect for our president and what he's accomplished so far, but I don't think he's infallible, and that's why I want to say very loudly that I firmly believe that charging tariffs above 9% is not a good idea."

The billionaire investor has assured that he is not recommending the 90-day pause to benefit his own portfolio. He explains that his Pershing Square fund has three-year call options on Nike, his only investment directly affected by the tariffs. Call options are contracts that confer the right, but not the obligation, to buy an asset at a certain price before a specific date.

As for Europe, Trump has also fired: "We have a deficit with the European Union of 350 billion dollars and it will disappear quickly. And one of the reasons, and one of the ways this can go away easily and quickly is that they're going to have to buy our energy from us, because they need it."