Thursday’s stock market decline came despite US data showing consumer prices fell unexpectedly in March. But the improvement in inflation is unlikely to persist if punishing tariffs on Chinese goods remain in place.
Trump kept the pressure on China, the world’s No 2 economy and second-biggest provider of US imports, by increasing tariffs on Chinese imports even higher to 145 percent in response to Beijing’s own 84 percent counter-tariffs.
The rollback on the other tariffs did little to lower the overall average import duty rate, according to Yale University researchers. The average effective tariff rate is the highest in more than a century, the Yale Budget Lab wrote on Thursday.
The Treasury on Thursday reported that gross customs duties in March totaled US$8.75 billion, up by about US$2 billion from a year earlier and the highest since September 2022. The increase is partly due to Trump’s tariff increases since February, a Treasury official said.
The budget results indicate that Trump’s recent statement that the US was now collecting US$2 billion a day from his tariffs is an overstatement.
CHINA TRADE WAR
US stock indexes had shot higher on Trump’s Wednesday announcement, and the relief continued into Asian and European trading on Thursday.
Before Trump’s U-turn, the upheaval had erased trillions of dollars from stock markets, raised fears of recession and led to an unsettling surge in US government bond yields that appeared to catch Trump’s attention.
