China and the US hit each other with further 50% tariffs

Welp, China's trade war with the US just escalated – again.

On Tuesday, the White House increased tariffs on Chinese exports by a further 50% – effective April 9.

• Trump threatened the tariff hike a day earlier, in response to China’s 34% retaliatory tariff.

Whips out calculator: 50% tariffs + 34% tariffs announced last week + an additional 20% imposed throughout February and March + already existing tariffs mean that average tariff rates on Chinese goods are now north of a mind-blowing 120%.

On Wednesday, Beijing hit back with a second round of retaliatory measures, including:

• An additional 50% tariff on US imports, in addition to the 34% tariff announced last week
• Adding a further 12 US companies onto China’s export control list, preventing these companies from purchasing dual-use civilian-military goods from China
• Adding an additional 6 US companies onto the Unreliable Entities List, banning them from trading or investing in China

China also submitted another symbolic appeal to the World Trade Organization against the US tariff hike.

Get smart: Beijing's response is firm but constrained.

• Responding to US tariffs with an identical, reciprocal tariff rate demonstrates Beijing won’t be pushed around, but also intentionally refrains from escalating tensions.

Get smarter: Donald Trump won’t see it that way.

• Trump sees his initial tariffs as levelling the playing field against Chinese non-tariff barriers and industrial subsidies. In his view, any Chinese retaliation is therefore an escalation.
• Trump is determined not to appear weak, increasing the likelihood that Washington responds to Beijing’s retaliation with further tariffs or non-trade barriers.

The upshot: This trade war isn’t going away anytime soon.