China refuses to comply with Trump tariff demands
China refuses to bow to Trump tariff ultimatum
China vowed to retaliate after President Donald Trump threatened a sharp increase in tariffs on Chinese imports, escalating tensions between the world’s two largest economies and raising the likelihood of a drawn-out trade conflict.
In a strongly worded statement Tuesday, China’s Ministry of Commerce called the U.S. move “a mistake on top of a mistake” and pledged to “fight to the end” if Washington proceeds. The response came just hours after Trump announced plans to raise tariffs by another 50% unless China reverses its own retaliatory actions, reports Bloomberg.
Markets React as Officials Brace for Impact
Chinese officials have ramped up efforts to stabilize the financial system amid the tensions. The People’s Bank of China loosened controls on the yuan, helping exports remain competitive, while state-linked investment funds—commonly referred to as the “national team”—stepped in to buy up domestic assets. Authorities also signaled the possibility of frontloading stimulus and expanding credit access.
Despite these moves, the yuan weakened to its lowest level since September 2023 in onshore trading and dropped to a two-month low offshore. Equities, however, staged a rebound, with the Hang Seng China Enterprises Index jumping 3.7% following its worst single-day drop since the 2008 financial crisis.
Trump’s latest tariff hike, set to apply on top of a 34% “reciprocal” duty starting April 9 and a 20% increase earlier this year, would bring the total tariff burden on Chinese goods to 104%. A White House official noted that this effectively doubles the cost of importing Chinese products into the U.S.
No Dialogue in Sight as Diplomatic Silence Persists
Although Beijing reiterated its willingness to resolve disputes through dialogue, Trump threatened to halt all discussions unless China complies with unspecified U.S. demands. The standoff is compounded by the lack of direct communication between the two leaders.
Trump has not spoken with President Xi Jinping since returning to office, marking the longest such silence in two decades for a sitting U.S. president. Michelle Lam, Greater China economist at Societe Generale SA, warned that “without Trump backing down, investors may need to prepare for trade decoupling between both countries.”
Additionally, Donald Trump on Sunday defended his decision to impose sweeping tariffs on nearly all U.S. trading partners, despite a sharp sell-off in financial markets and concerns from business leaders.
