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Tensions between China and the United States escalated on Tuesday, with both nations edging closer to an all-out trade war after US President Donald Trump imposed a staggering 104% tariff on all Chinese imports. In a dramatic escalation, both sides dug in their heels, with Beijing vowing to resist America’s aggressive stance “to the end.”
Initially, Trump introduced a 34% additional tariff on Chinese goods. However, after China retaliated with a 34% tariff on US products, Washington responded by imposing a further 50% duty. When factoring in the tariffs already imposed earlier in the year, the total tariff increase on Chinese goods under Trump’s second term reaches a striking 104%. In response, China slammed what it described as US blackmail and reiterated its commitment to push back against these actions.
Speaking with European Commission President Ursula Von der Leyen on Tuesday, Chinese Premier Li Qiang assured that China is well-equipped to “fully offset” any external economic shocks. He emphasized his country’s optimism about sustaining its economic development throughout 2025, despite the new tariff threat from the US. Li also remarked that China’s macroeconomic policies had been carefully crafted to address various uncertainties.
Li condemned the US’s actions as a prime example of unilateralism, protectionism, and economic coercion. He affirmed that China’s response aims not only to protect its own interests but also to defend global trade rules. “Protectionism leads nowhere – openness and cooperation are the right path for all,” he told Von der Leyen, according to a Bloomberg report.
This move follows China’s growing resistance to Trump’s tariffs, which have already impacted both economies. In addition to the US tariffs on Chinese goods, Europe now faces a 20% levy on many of its exports. This global economic turbulence has triggered fears of an impending recession, with markets around the world experiencing significant sell-offs following the introduction of Trump’s baseline 10% tariffs over the weekend.
The economic fallout has been swift, with many economists questioning the effectiveness of Trump’s trade policy. While the president argues that these tariffs will help revive American manufacturing by pushing companies to relocate back to the US, experts warn of higher inflation as prices rise due to the increased tariffs.
On Tuesday, Trump claimed that the United States was “taking in almost $2 billion a day” from the tariffs. Despite significant market volatility, Trump refused to alter his course, while Canada announced that it would impose new tariffs on certain US auto imports starting Wednesday.
The EU, already impacted by Trump’s steel and aluminum tariffs, is preparing its response. French President Emmanuel Macron urged Trump to reconsider, warning that if the EU is forced to retaliate, it will do so. In retaliation for the US tariffs on steel and aluminum, the EU plans to impose tariffs of up to 25% on American goods, including soybeans and motorcycles.
Trump has also been engaging in “tailored deals” with various trading partners, including Japan and South Korea, and has mentioned that countries like Argentina, Vietnam, and Israel have offered to reduce their tariffs in response to the escalating trade dispute.
Despite growing criticism both domestically and internationally, Trump has made it clear that his administration will continue its aggressive trade tactics. With both sides refusing to back down, the future of global trade remains uncertain.
