In a sharp escalation of the ongoing US-China trade war, China on Tuesday vowed to “fight to the end” in response to fresh 50 percent tariffs threatened by US President Donald Trump. This new chapter in global trade tensions has wiped trillions off international markets and reignited fears of a looming global recession.
Trump, unwavering in his aggressive tariff strategy, has dismissed calls to pause despite the massive global market sell-off. China, a key trading partner and the US’s major economic rival, hit back by announcing 34 percent tariffs on American goods, effective Thursday.
“I have great respect for China but they can not do this,” Trump said from the White House. “We are going to have one shot at this… it is an honour to do it.”
Beijing, however, called the US move “blackmail” and insisted it would not cave to pressure.
“If the US escalates its tariff measures, China will resolutely take countermeasures to safeguard its own rights and interests,” a commerce ministry spokesperson said.
Still, China signaled an openness to dialogue, reiterating that “there are no winners in a trade war.”
Global Markets Reel Amid US-China Trade Showdown
The tariff tit-for-tat has triggered turmoil across global stock exchanges. On Monday, Hong Kong’s Hang Seng Index plunged 13.2%—its steepest one-day drop since the Asian financial crisis—before modestly recovering in early Tuesday trading.
On Wall Street, both the Dow Jones and S&P 500 closed lower, while Asian export hubs like Thailand, Indonesia, and Vietnam also suffered losses.
In Singapore, Prime Minister Lawrence Wong criticized the US move during a parliamentary session, saying:
“These are not actions one does to a friend.”
Meanwhile, China’s central bank announced it would back its sovereign wealth fund in stabilizing markets, following a sharp hit to equities in Shanghai.
Trump Stands Firm: “Don’t Be Weak! Don’t Be Stupid!”
President Trump doubled down on his tariff strategy, confirming he’s not considering a pause and even cancelled upcoming meetings with Chinese officials. He added that the US remains open to negotiations with any country willing to come to the table.
While meeting with Israeli PM Benjamin Netanyahu, Trump said: “There can be permanent tariffs, and there can also be negotiations, because there are things that we need beyond tariffs.”
US Treasury Secretary Scott Bessent indicated that Japan may receive “priority” in tariff talks, noting the country’s swift response to the new trade landscape.
A new 10 percent baseline tariff on all US imports went into effect Saturday. From Wednesday, additional duties will target key players:
- 34% for Chinese goods
- 20% for EU products
EU Prepares To Hit Back
In Luxembourg, EU trade ministers convened to strategize a response. French Trade Minister Laurent Saint-Martin called for tough measures:
“We must not exclude any option on goods, on services… The European toolbox is very comprehensive and can also be extremely aggressive.”
Fears of Inflation and Recession Loom
Economists continue to warn of the ripple effects. JPMorgan Chase CEO Jamie Dimon cautioned that inflation is likely, adding:
“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Even Republican lawmakers are raising alarms. Senator Ted Cruz warned the tariffs could lead to job losses, rising consumer prices, and a potential economic “bloodbath” for Republicans in next year’s midterms.
