HONG KONG—Amidst rising tensions between the United States and China over trade negotiations, President Donald Trump has threatened to impose an additional 50% tariff on Chinese goods if Beijing does not withdraw its tariffs on U.S. goods. The Chinese Commerce Ministry has responded by stating that if the U.S. continues with its tariff threats, China will “fight to the end,” emphasizing that the escalation of tariffs is a mistake.
The Chinese Foreign Affairs Ministry has not yet provided a comment in response to Trump’s new tariff threat. Trump’s ultimatum follows China’s retaliatory tariffs on U.S. goods and comes at a time when many countries are seeking to negotiate trade deals with the U.S. The escalating tensions have caused uncertainty in global markets, leading to fluctuations in stock prices.
In an effort to stabilize its markets, China has seen stocks rise despite the looming threat of increased tariffs. The Commerce Ministry of China has urged the United States to cancel unilateral tariff measures and resolve trade disputes through dialogue. The Ministry emphasized that pressure and threats are not the solution to resolving trade conflicts, reinforcing that protectionism leads to nowhere and that there are no winners in a trade war.
Economists in Shanghai, such as Andy Xie, have warned that China will retaliate with the same 50% tariffs if Trump goes through with his threat. Xie believes that Beijing has reached a point where compromise will only lead to more pressure from Trump, forcing China to take a stand. China has already decreased its reliance on the American market, with exports to the U.S. dropping significantly since the onset of the trade war.
Trump has hinted at the possibility of reducing tariffs if China agrees to a deal regarding TikTok’s U.S. operations. Despite the potential for negotiations, Trump has shown reluctance to pause tariffs on China, further intensifying the economic uncertainty. The ongoing trade tensions between the two global superpowers signal a potential decoupling of their economies in the near future.