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China has vowed to "fight till the end" after US President Donald Trump threatened to impose an additional 50% tariff on Chinese imports if Beijing doesn't withdraw its retaliatory measures by Wednesday. This dramatic escalation has pushed the world's two largest economies closer to an all-out trade war.
The Chinese Commerce Ministry issued a defiant statement: "The US threat to escalate tariffs on China is a mistake on top of a mistake. China will never accept the blackmail nature of the US." This latest development follows Trump's initial 34% tariff on Chinese goods, which prompted Beijing's matching 34% countermeasure scheduled to take effect April 10.
If implemented, the combined new tariffs would push the total US levy on Chinese imports to a staggering 104%, potentially crippling China's export sector. "These tariffs will wipe out the entire profit margin for the Chinese export sector," warned Dan Wang from the Eurasia Group consultancy.
Financial markets have responded with volatility. While most Asian markets opened higher on Tuesday, Taiwan experienced a further 4% decline. Thailand's stock exchange plummeted over 4% when trading resumed after a holiday, prompting authorities to ban short-selling for the week. Europe's major stock markets, including London's FTSE 100, all closed down more than 4% on Monday.
The People's Bank of China set the midpoint rate for onshore yuan at 7.2038 per dollar on Tuesday, its weakest level since September 2023. Robin Brooks, senior fellow at Brookings Institution, called this "a big signal" and "a clear shot across the bow of Washington," suggesting Beijing could devalue its currency further if tensions escalate.
Some nations are scrambling to mitigate potential damage. Vietnam's Prime Minister Pham Minh Chinh announced plans to purchase more American goods, including security and defense products, as his country faces a potential 46% tariff rate. Thai Prime Minister Paetongtarn Shinawatra is seeking direct negotiations with the US.
Analysts remain pessimistic about a quick resolution. "I believe that China means it when it says it will fight to the end. It will be tit-for-tat," said Wang. Alfredo Montufar-Helu from The Conference Board think tank added: "It would be a mistake to think that China will back off. Unfortunately, we've now reached an impasse that will likely lead to long-term economic pain."
Trump has shown no signs of compromise, declaring on Truth Social that "all talks with China concerning their requested meetings with us will be terminated!" As the Wednesday deadline approaches, global markets remain on edge awaiting the next move in this high-stakes economic confrontation.
