China Claims Credit for Trump's Tariff Pause Amid Escalating Trade War

China's New Tariffs and US Response

• 🇨🇳 China announced fresh trade counter-measures, hiking tariffs on imports of US goods to 125% from 84%, effective Saturday.
• 🇺🇸 This escalation occurs even as President Donald Trump hit pause on tariffs for other countries, a move Beijing claims credit for.

WTO Warns of Economic Fragmentation

• 📉 The escalating trade tensions between the US and China pose a significant risk of a sharp contraction in their bilateral trade.
• ⚠️ Preliminary projections suggest merchandise trade could decrease by as much as 80%.
• 🌍 A division of the global economy into two blocks could lead to a long-term reduction in global real GDP by nearly 7%.

Global Economic Impact

• 📊 Calculations indicate that before the 90-day pause, the trade war would result in a fall by 2040 of 0.7% in overall global GDP.
• 📈 Current statistics suggest a 3-7% overall reduction in global trade as a whole, which is considered huge.
• 🌐 The negative macroeconomic effects will extend beyond the US and China to other countries, especially the least developed nations.