China has declared its intention to “fight to the end” against new tariffs of 50% proposed by US President Donald Trump, further escalating a trade conflict that has already erased trillions from global markets.
Last week, Mr. Trump disrupted the global economy by introducing sweeping tariffs that have raised fears of an international recession, yet he has ruled out any pause in his aggressive trade stance despite a significant market downturn.
In response, China, America’s primary economic competitor, announced a 34% duty on US imports set to take effect on Thursday, igniting a confrontation between the two largest economies in the world.
This swift retaliation prompted Mr. Trump to warn that he would introduce even more tariffs if China continued to resist his wave of tariffs, pushing the total duties on Chinese products to 104%.
“We are going to have one shot at this… I’ll tell you what, it is an honour to do it.”
China’s commerce ministry stated, “The US side’s threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American side’s blackmailing nature.”
“If the US insists on having its way, China will fight to the end,” they emphasized.
US President Donald Trump announced he would impose an additional 50% duty on imports from China.
The European Union has proposed its own counter-tariffs in response to Mr. Trump’s sweeping tariff actions that have affected numerous countries, causing financial markets to plunge and raising concerns that the global economy may be on the brink of recession.
Asian Markets Begin Stronger
After several tumultuous days for investors, financial markets appeared to be regaining stability, prompting some business leaders, including those near Mr. Trump, to encourage the president to reconsider his stance.
Japan’s Nikkei index surged 6% today, bouncing back from a 1.5-year low reached during the previous session, following a phone call in which Mr. Trump and Japanese Prime Minister Shigeru Ishiba agreed to commence trade discussions.
Chinese blue-chips advanced by 0.7%, recovering a small portion of the over 7% decline.
Hong Kong’s Hang Seng Index leaped 2% after experiencing its worst day since 1997. Additionally, US stock futures also indicated upward movement following a volatile trading session which saw the market dip to its lowest point in over a year.
Mr. Trump asserted that the tariffs — a minimum of 10% on all US imports, with selective rates reaching as high as 50% — would allow the United States to reclaim its industrial base that he claims has deteriorated over decades of trade liberalization.
“It’s the only chance our country will have to reset the table. Because no other president would be willing to do what I’m doing, or to even go through it,” he remarked to reporters at the White House.
Simultaneously, the European Commission has suggested counter-tariffs of 25% on a selection of US goods, including soybeans, nuts, and sausages, while omitting other potential items like bourbon whiskey from the list, according to a Reuters document.
Read more: Trump not considering tariff pause, threatens more measures against China
Officials expressed their readiness to negotiate a “zero for zero” agreement with Mr. Trump’s administration.
“Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise,” stated EU Trade Commissioner Maroš Šefčovič at a press conference.
The EU is already contending with tariffs on autos and metals, along with facing a 20% tariff on other products, while Mr. Trump has also indicated he may impose tariffs on EU alcoholic beverages.
Investors and political leaders have been attempting to ascertain whether Mr. Trump’s tariffs are a permanent fixture or a strategic maneuver to secure concessions from other nations.
According to Politico, US Treasury Secretary Scott Bessent met with Mr. Trump in Florida on Sunday to advocate for a focus on establishing trade agreements with partners to ease market concerns regarding the US strategy’s ultimate objective.
Administration officials revealed that numerous other countries have reached out in hopes of averting the tariffs set to take effect tomorrow.
Officials from Mr. Trump’s administration assert that the president is fulfilling a promise to reverse decades of trade liberalization that he believes have undermined the US economy.
Traders conducting business on the New York Stock Exchange floor.
“He’s doubling down on something that he knows works, and he’s going to continue to do that,” stated White House economist Kevin Hassett on Fox News.
“But he is also going to listen to our trading partners, and if they come to us with really great deals that benefit American manufacturing and American farmers, I’m sure he’ll listen,” he added.
Wall Street leaders have voiced their concerns regarding US tariffs, with JPMorgan Chase CEO Jamie Dimon indicating that they could have lasting negative impacts, while fund manager Bill Ackman warned that they could lead to an “economic nuclear winter.”
Mr. Ackman is among a few of Mr. Trump’s supporters who have raised questions about the strategy.
Billionaire Elon Musk, who is spearheading Mr. Trump’s initiatives to cut government spending, advocated for zero tariffs between the US and Europe over the weekend.
In response, Mr. Trump’s trade advisor Peter Navarro dismissed the Tesla CEO’s input, referring to him as a “car assembler.”
Amid concerns over a potential recession, investors are now betting that the US Federal Reserve might cut rates as soon as next month. Mr. Trump reiterated his call for the central bank to lower rates yesterday, but Fed Chair Jerome Powell has indicated there is no immediate rush to do so.
