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US-China Trade War Escalates as Beijing Vows to “Fight to the End” Over Tariffs
Tensions escalate in the ongoing trade war between the United States and China as the Chinese government declared it will “fight to the end” if the U.S. proceeds with escalating measures. This declaration follows threats from Washington to impose substantial additional tariffs in retaliation for Beijing’s reciprocal levies.
China Accuses US of Blackmail
China’s commerce ministry responded sharply on Tuesday, accusing the U.S. of “blackmail.” The ministry stated that President Trump’s threat to increase tariffs to 50% if China did not reverse its existing 34% retaliatory tariffs was a “mistake on top of a mistake.”
Beijing asserted its resolve to “resolutely take countermeasures,” reiterating its firm stance: “China will fight to the end if the U.S. side is determined to pursue this erroneous path.”
Market Reaction and Investor Concerns
Following a turbulent day in global markets, Asian markets showed signs of slight recovery in early trading on Tuesday. The previous day’s market volatility prompted billionaire investor Bill Ackman, a past supporter of President Trump, to advocate for a temporary halt to further tariff escalations.
Tit-for-Tat Tariffs Deepen Trade Dispute
Tuesday’s strong response from Beijing marks the latest escalation in the worsening trade dispute between the two economic powers. Last week, the U.S. announced a range of tariffs, between 10% and 50%, targeting various trading partners, scheduled to take effect this Wednesday. Among these, a 34% tariff was placed on goods imported from China, supplementing a previous 20% levy. China swiftly retaliated with a reciprocal 34% tariff on U.S. imports. In response, President Trump threatened to further increase tariffs to 50% on Chinese imports if Beijing did not retract its measures.
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“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose additional tariffs on China of 50%, effective April 9th,” President Trump stated on social media. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
China Condemns US Actions as “Extortion”
A strongly worded editorial published by Xinhua, China’s official state news agency, denounced President Trump’s actions as “naked extortion.”
The editorial criticized the U.S.’s stance: “Utterly absurd is the underlying logic of the United States: ‘I can hit you at my will, and you must not respond. Instead, you must surrender unconditionally’,” the state media outlet asserted. “This is not diplomacy. It is blatant coercion disguised as policy.”
Reagan Speech Resurfaces Amidst Tariff Spat
Adding another layer to the escalating tensions, a 1987 speech by former U.S. President Ronald Reagan, critical of tariffs, was widely circulated on social media by China’s foreign ministry. Chinese media outlet, The Paper, noted that the video clip, in which Reagan cautioned against tariffs due to their potential to trigger retaliation and harm the U.S. economy, “has a new meaning in 2025″.
Analysts View Dispute as “Game of Chicken”
Wen-ti Sung, a non-resident fellow at the Atlantic Council’s Global China Hub, characterized the situation between the U.S. and China as a “game of chicken.”
“Like two race cars driving directly toward each other, whoever swerves first will stand to lose prestige and profit,” Sung explained.
Sung further elaborated, “China appears determined to signal a bipolar global order, asserting its refusal to allow Washington to dictate terms, fearing it could set a precedent. Moreover, Beijing seeks greater assurance from President Trump that accommodating his demands will truly resolve the issue, rather than merely encourage further demands.”
“If not, China’s primary recourse is likely to be proportional retaliatory trade sanctions against the U.S., while concurrently attempting to negotiate with Washington.”
Global Market Repercussions and Responses
Despite the ongoing trade tensions, Japan’s Nikkei index experienced a 6% surge on Tuesday, recovering from an 18-month low the previous day. This rebound followed reports that President Trump and Japanese Prime Minister Shigeru Ishiba agreed to initiate trade discussions during a phone call on Monday.
Chinese blue-chip stocks also saw gains, climbing 0.7%, partially offsetting the significant slide of over 7% on Monday. Hong Kong’s Hang Seng Index rebounded by 2% after experiencing its steepest decline since 1997. U.S. stock futures indicated positive movement as well, following a volatile trading session that saw markets reach their lowest point in over a year.
EU and Taiwan Respond to US Tariffs
President Trump’s “liberation day” tariffs have impacted numerous countries beyond China, prompting widespread responses. The European Commission has proposed counter-tariffs of 25% on a selection of U.S. products, including soybeans, nuts, and sausages. However, the EU has also expressed willingness to negotiate a “zero for zero” agreement with the U.S.
EU Trade Commissioner Maros Sefcovic stated at a press briefing, “Sooner or later, we will sit at the negotiation table with the U.S. and find a mutually acceptable compromise.”
The European Union, already facing tariffs on vehicles and metals, is anticipating an additional 20% tariff on other goods starting Wednesday. President Trump has also threatened to impose tariffs on alcoholic beverages from the bloc.
Taiwan, which faces a 32% reciprocal tariff and experienced its most severe market downturn on Monday, has signaled its readiness to negotiate “at any time.” President Lai Ching-te has proposed a zero-tariff agreement, the elimination of trade barriers, and increased investment in the U.S.
Taiwan has consistently maintained that its substantial trade surplus with the U.S. is driven by the U.S.’s increasing demand for technology, given Taiwanese companies’ role as key suppliers to major corporations like Apple and Nvidia.