President Donald Trump warned Monday he may impose a fresh 50% tariff on Chinese goods if Beijing doesn't cancel its planned 34% retaliatory tax on U.S. imports, which is set to take effect Thursday. The threat adds to an already tense trade environment, just days before Trump's broader tariff package covering all trading partners is scheduled to kick in.
The U.S. has already hit China with a 20% levy earlier this year. If the new 50% tariff is enacted, combined with previous rounds, the effective duty on some Chinese goods could reach 104%. Trump's escalating stance comes amid mounting concern over a global trade war, with other nations now actively negotiating to avoid being swept up in the dispute.
Chinese officials announced their 34% tariff last week in direct response to U.S. actions. Meanwhile, the Biden administration confirmed talks are ongoing with dozens of nations. Israeli Prime Minister Benjamin Netanyahu is expected at the White House Monday, while the European Commission has reportedly proposed a zero-for-zero tariff pact on industrial goods.
It's important to note that the SPDR S&P 500 ETF ( SPY ), which serves as a gauge of the broader U.S. equity market by tracking the S&P 500 Index, has recorded sharp losses across all key timeframes. The ETF is down 10.5% over the past week, 13.79% over the past month, and 15.15% year-to-date. Over a six-month period, it has declined 13.21%, while its one-year return sits at -3.07%.
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