BEIJING, April 8: — China vowed to retaliate against what it called “blackmail” by the United States on Tuesday, after US President Donald Trump threatened to hike tariffs on Chinese imports by 50% starting Wednesday, deepening a global trade conflict.
“The US side’s threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American side’s blackmailing nature,” said a spokesperson for China’s commerce ministry. “If the US insists on having its way, China will fight to the end.”
The sharp response followed Trump’s announcement that he would raise duties on imports from China, escalating tensions after Beijing imposed a 34% reciprocal tariff in response to earlier US measures. The tit-for-tat sparked fears of a prolonged global trade war.
As financial markets reeled, the European Union unveiled its own countermeasures, proposing 25% duties on US goods such as soybeans, nuts and sausages. However, other politically sensitive items like bourbon were left off the list. “Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise,” said EU Trade Commissioner Maros Sefcovic.
Stock markets showed signs of recovery after steep declines. Japan’s Nikkei rebounded 6% on Tuesday after a call between Trump and Japanese Prime Minister Shigeru Ishiba set the stage for bilateral trade talks. Chinese blue-chips rose 0.7% and Hong Kong’s Hang Seng Index jumped 2% after Monday’s rout, its worst since 1997.
In contrast, Indonesian markets plunged, with stocks down 9% and the rupiah hitting a record low after a holiday pause.
Trump defended the tariffs, saying they were necessary to restore US manufacturing. “It’s the only chance our country will have to reset the table,” he told reporters. “No other president would be willing to do what I’m doing.”
White House economist Kevin Hassett said Trump is open to negotiations but remains committed to his stance. “He’s doubling down on something that he knows works,” Hassett said. “If [trading partners] come to us with really great deals that advantage American manufacturing and American farmers, I’m sure he’ll listen.”
Backlash from business leaders was swift. JPMorgan CEO Jamie Dimon warned of long-term economic damage, while fund manager Bill Ackman said the tariffs could trigger an “economic nuclear winter.” Billionaire Elon Musk called for zero tariffs between the US and Europe, only to be dismissed by Trump adviser Peter Navarro as a “car assembler.”
With investor anxiety mounting, some analysts expect the Federal Reserve to consider cutting interest rates. Trump repeated his demand for a rate cut on Monday, but Fed Chair Jerome Powell has yet to signal any shift in policy.
As of Tuesday, US futures pointed to modest gains, but uncertainty lingered over whether Trump’s tariffs represent a long-term policy or a short-term bargaining chip.
Officials in Washington say dozens of countries have approached the US in hopes of averting the next round of duties set to take effect Wednesday.
