China will increase tariffs on US goods to 84 per cent from 34 per cent and the EU has approved its first set of retaliatory measures against the US in response to levies by President Donald Trump, escalating trade wars between the world's biggest economic powerhouses.
The increased tariffs will be take hold from April 10, China’s Office of the Tariff Commission of the State Council said on Wednesday.
The action by the US "seriously damages the rules-based multilateral trading system", the council added, calling it a "mistake on top of a mistake".
The move comes after US tariffs on Chinese goods of 104 per cent took effect on Wednesday. Mr Trump added a 50 per cent additional duty in response to China imposing a 34 per cent retaliatory tariff, which matched levies he imposed on Beijing last week.
Also on Wednesday, the EU approved its first set of retaliatory tariffs against the US, escalating another battlefront in the trade war.
The duties – which targets goods from metals to commercial products – will be collected from April 15, the European Commission said. The response package, revealed last month, could also include items such as home appliances, agricultural products and textiles.
“The EU considers [the] US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy,” a commission statement read. "The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial."
Last week, Mr Trump announced sweeping tariffs on US trading partners, imposing a minimum 10 per cent levy on all imports.
Vietnam was a target of some of the harshest rates, at 46 per cent, while India was hit with a 26 per cent tariff and the EU 20 per cent. Pakistan (29 per cent) and Israel (17 per cent) were also on a list of more than a dozen countries hit by the tariffs.
The US President also placed a separate 20 per cent levy on China, related to fentanyl trafficking.
Mr Trump said the action was imposed on “friend and foe alike” because, “in many cases, the friend is worse than the foe in terms of trade”.
Fears of a prolonged war of retaliatory tariffs between the world’s biggest economies, which could lead to a global trade war and dent economic growth severely, have spooked global financial markets, with analysts also predicting the possibility of a recession.
But not all Asian nations are retaliating against Mr Trump's levies. South Korea's acting president Han Duck-soo said his government will not fight against the 25 per cent tariffs announced. These could hit the country's export-led economy that sells brands such as Samsung, LG and Hyundai to US consumers.
“I think we should, in a very cool way, assess what this 25 per cent means for us, and we should, in a very cool way, negotiate with them,” Mr Han said.
