China has increased its tariff on US imports to 84% after the US hiked tariffs on goods imported from China to 104% on Tuesday.

On Wednesday, the Chinese finance ministry imposed tariffs of 84%, from 34% previously, taking effect on 10 April, Kallanish reports. 

“China urges the US to immediately correct its wrong practices, cancel all unilateral tariff measures against China, and properly resolve differences with China through equal dialogue on the basis of mutual respect,” it says in a statement.

The retaliation came as a response to US President Donald Trump’s levies on Chinese goods, which were revised from 34% to 84%, reaching a total of 104% when stacked on previous levies. These took effect on Wednesday when other “reciprocal” tariffs on the US’ closest trading partners were also implemented.

Beijing has also filed another complaint against the US for violating World Trade Organization rules. The government says it will firmly defend its rights and interests in accordance with WTO rules and “firmly safeguard the multilateral trading system and international economic and trade order.”

This global trade war is stoking inflation and raising concerns over a recession, with stock markets across Europe, Asia and North America posting significant losses over the past week. The FTSE 100 and the Dax both slipped over 3% on Wednesday ahead of the US market open, which is expected to see further drops.

However, according to Goldman Sachs, markets are still not priced for an average recession. “We think there is a high chance that we continue to push toward full recession pricing, which would imply weaker equities, wider credit spreads, a deeper Fed cutting cycle and higher longer-dated equity volatility,” analysts comment. 

“Potential conditions for markets to stabilise include: a policy reversal; a large enough pricing discount to cushion against downside risks; or signs that the economic impact of tariffs was proving milder than feared. Of those, the most direct and quickest route to recovery would be a significant reversal in intended tariff policy.”

Last year, the US’ exports to and imports from China were worth $143 billion and $438 billion, respectively, according to US government data. The biggest US exports to China included seeds and grains, oil and gas, aerospace products and parts, pharmaceuticals, and semiconductors. China’s major exports to the US were communications equipment, computers, electrical equipment, and various consumer goods.