United States Imposes Tariffs as High as 145% on China and Canada! U.S. Treasury Secretary Bessent: Further Devaluation of the Yuan is Playing with Fire**###**
China Begins Retaliation with 84% Tariff on U.S. Goods
As the U.S.-China trade war escalates, China announced on April 9 an 84% retaliatory tariff on U.S. goods in response to the Trump administration’s 104% tariff policy announced the day before. According to White House officials, U.S. tariffs on Chinese goods have now reached 145%.
U.S. Treasury Secretary Scott Bessent, in an interview on April 10, emphasized that the United States holds a decisive advantage. In addition to tariffs, Bessent pointed out that China must address the fentanyl issue, warning that any further depreciation of the Chinese yuan would only harm itself.
Current Dynamics in the U.S.-China Tariff Tug-of-War
China announced an 84% tariff on American goods on April 9.
Trump immediately announced a 104% retaliatory tariff on Chinese goods.
White House officials indicated that U.S. tariffs on Chinese goods have now reached 145%.
In response, U.S. Treasury Secretary Bessent criticized, “China is not looking to return to the negotiating table but has chosen confrontation, which will only increase its own harm.”
U.S. Demands China Strictly Control Fentanyl, Punish Drug Traffickers
Bessent pointed to the drug issue during the interview: “More than 100,000 Americans die from fentanyl each year, and China is the main culprit.” He urged China to impose the same penalties on domestic drug traffickers (which can include the death penalty for drug trafficking in China) to demonstrate sincerity in addressing the problem.
Multiple Objectives Behind the Tariffs: From Anti-Drug Efforts to Economic Restructuring
When asked about the purpose of these tariffs—whether to combat drugs, increase tax revenue, or facilitate the return of supply chains to the U.S.—Bessent responded, “All of the above. We are taking a multi-faceted approach. Tariffs, tax reform, and border control are all aimed at restructuring the U.S. economy.”
Manufacturing Reshoring Will Take Time; Supply Chain Shifts Are Not Instantaneous
Regarding Americans’ habit of purchasing inexpensive goods from China, Bessent admitted, “Shifting the global supply chain back to the U.S. is not an overnight process, but we are working hard to sign trade agreements with allies like Japan, South Korea, and Vietnam to accelerate this transition.”
Trump Accelerates Push for Tax Reform Agenda; Congress May Reach Consensus by Late May
In addition to tariffs, Bessent revealed that Trump is actively lobbying Congress to advance tax reform proposals, which include:
- Tax exemption for tip income
- Potential millionaire’s tax
- Coordination with debt ceiling management
He emphasized that the current progress is “very smooth” and confirmed that Trump is personally intervening to mediate divisions within the Republican Party this week.
Corporate Concerns Persist; Bessent Calls It Just a Short-Term Shock
In response to reports of companies hesitating to finance, merger activities stalling, capital expenditures shrinking, and CEOs withholding 2025 financial forecasts, Bessent reassured, “This is just a periodic deleveraging, not a systemic risk. It is merely a temporary shock, and things will stabilize once a trade agreement is finalized.”
He added that upcoming deregulation in the banking sector will further enhance confidence, including easing capital thresholds and making it easier for banks to purchase U.S. Treasury bonds.
Bessent Warns China Against Deliberately Depreciating the Yuan
Bessent also cautioned that if China attempts to depreciate the yuan again, it could lead to a “race to the bottom” in currency devaluation, harming everyone involved. “If China intends to sell off U.S. Treasury bonds, it would actually strengthen the dollar, which would in turn lead to a rise in the yuan, ultimately hurting them,” he emphasized.
The Yuan Cannot Become a World Reserve Currency; The Dollar Remains Strong
Regarding rumors that the dollar’s dominant position might be undermined, Bessent contemptuously remarked, “How can a country that treats its own currency as a weapon earn trust in its money?” He stressed that the U.S. maintains a strong dollar policy, noting that military spending and fiscal stimulus in Europe and Japan will further bolster the dollar’s foundation.
Biden’s Administration Leads to Economic Recession; Trump Administration Eases Restrictions to Promote Private Growth
Facing market expectations of a U.S. economic recession, Bessent acknowledged that the U.S. did indeed experience a technical recession under Biden’s administration. However, he pointed out that the current government aims to “de-governmentize” the economy while promoting cuts in fiscal spending, downsizing, and easing financial restrictions to allow private enterprises to drive economic growth again.
Trump’s Policy Takes a Comprehensive Approach: Trade, Tax Reform, and Financial Deregulation
In summary, the Trump administration is combating trade and economic challenges through a three-pronged approach:
- Trade War: Increasing tariffs and pressuring China.
- Tax Reform: Promoting tax exemptions for tips, lowering middle-class tax burdens, and potentially imposing a wealth tax to gain congressional consensus.
- Financial Deregulation: Easing banking regulations, expanding sources for U.S. Treasury bond purchases, and reducing government intervention.
Finally, Bessent reiterated his view on the current market volatility: “We are deleveraging, but we will recover soon. President Trump’s upcoming round of policies will once again drive the U.S. economy.” However, key variables such as market acceptance and potential concessions from China remain uncertain.
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