China Vows Retaliation Against US Tariff Threats

China slammed the US for threatening to hike tariffs and pledged to retaliate if Washington follows through, raising the stakes of the trade war between the world’s two largest economies.
“The US threat to escalate tariffs on China is a mistake on top of a mistake, which once again exposes the extortionate nature of the US,” the Chinese Ministry of Commerce said in a Tuesday statement. “If the US insists on its own way, China will fight to the end.”
Read More: Trump Threatens More China Tariffs, Teases Talks With Others
The Chinese response came hours after US President Donald Trump vowed to slap additional 50% import taxes on China unless it withdraws its tit-for-tat retaliation against his earlier levies. The blunt reaction suggests China intends to resist Trump’s pressure, raising the prospect of a protracted conflict.
“The rhetoric from China is strong. Without Trump backing down investors may need to prepare for trade decoupling between both countries,” said Michelle Lam, greater China economist at Societe Generale SA.
China’s onshore yuan fell to the weakest since 2023 after the Chinese central bank eased its tight grip on the currency. A gauge of Chinese stocks listed in Hong Kong rose as much as 3.7% after its worst day since the financial crisis on Monday as the nation’s state-backed funds vowed to support the market.
Trump’s latest charge would come on top of the 34% “reciprocal” duty set to kick in on April 9 as well as a 20% levy implemented earlier this year, according to a White House official. That takes the cumulative tariff announced this year to 104%, or effectively doubling the import price of any good shipped from China to the US.
**US Less Important as an Export Destination for China**
Exports to other markets are increasingly significant
Source: China's General Administration of Customs
The Chinese Ministry of Commerce also called for dialogue to resolve disputes in its statement, although Trump on Monday said “all talks with China” about a meeting will be terminated if Beijing doesn’t take action, without specifying what would be required.
The escalation of tensions is dimming the prospect of any imminent leadership call. Trump hasn’t spoken with Chinese President Xi Jinping since returning to the White House, the longest a US president has gone without talking to his Chinese counterpart post-inauguration in 20 years.
Earlier in the week the Communist Party’s official newspaper published an editorial declaring Beijing is no longer “clinging to illusions” of striking a deal. Xi has vowed to boost domestic consumption as the tariffs are expected to hurt exports, a sector responsible for a third of China’s economic growth last year.
**What Bloomberg Economics Says...**
“The prospect of a heavy external blow to growth heightens the urgency to fast-track monetary and fiscal stimulus — and we see it coming sooner than before.