US President Trump further increased the tariff rate on imports from China to 145%, signaling that his global tariff war is largely focused on China. Yahoo Finance Senior Columnist Rick Newman joins Market Domination Overtime to break down what drove Trump's tariff pause and the factors at play in the US–China trade war.
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Markets selling off today as President Trump's trade war continues today, increasing the tariff on China to 145 percent. For more, Brian Yao finance senior columnist Rick Newman. Rick.
Hey guys. Uh, I heard one analyst today describe that 145 percent tariff as an effective blockade of US imports and suggesting that Chinese ships wouldn't even leave ports bound for the United States as long as that is in effect. So, uh, they started out as a Trump trade war against the world and I think we're finally sort of like getting to the point of what Trump actually wants to do. He seems to realize that he can't sort of take on everybody. So he's really going to focus this on China. And I think importantly, um, Trump has also shown uh some some of his pain thresholds. I mean, we got a basically, we got a bare market in the US stock market. Stocks down almost 20 percent. Perhaps more important than that, we saw this wobble or quiver in credit markets where uh long-term interest rates should have been going down, but they were probably go, but they were going up, probably because uh foreign investors were selling uh the dollar and people were uh pile piling into treasuries. Um so that is a that and that probably was the thing that really got Trump to call off the reciprocal tariffs on April 9th. So China knows that. China sees uh what Trump's vulnerabilities are and at the same time, China is basically saying, uh we we accept the fight. We're gonna go the distance here. So there it's there's no way to know how this ends.
There is no way to know how it ends. I mean, um and we've heard a lot of opinions in either direction as to how strong China's position is in terms of of its leverage, Rick.
Right. So, um, this will hurt China. Um, China would prefer to avoid a trade war, but um, you know, you you have to think a little bit about how Xi Jinping, the president, has positioned the country. He has been telling, uh, people in China for years that China needs to develop more self-reliance, that cannot remain uh dependent forever on selling cheap stuff to the rest of the world. Um, clearly, she aspires for China to be a superpower. And without a doubt, he resents and really bristles at uh trade bullying from Donald Trump. So, you know, we we went through some of this uh similar rhetoric back in 2018 and 19 between the two countries, but the stakes were far lower. So, um, Trump has really declared a trade war on China. And China is a proud country. So, if China is gonna find a way to make some kind of deal with Trump, it's gonna have to be, you know, the old-fashioned way where there's some face saving on both sides and nobody, uh, nobody has to say they beat the other. And, you know, both sides are just digging in their heels right now. So we are gonna see probably some large price increases within, I don't know, five or six weeks, uh, on a lot of these products that come from China that we cannot readily get from someplace else.
