 "US vs China: Will Trump levy a 104% tariff on Beijing? Will Xi Jinping back down?")
How do you deal with a bully? If you are China, you stand up to your bully, vowing that it will “fight to the end”.
On Monday (April 7), signs of an all-out trade war loomed between the US and China after President Donald Trump threatened Beijing with another 50 per cent tariff unless it withdrew its retaliatory 34 per cent levy it imposed on Washington.
But it seems that China isn’t ready to budge; its Commerce Ministry said a statement, “The US threat to escalate tariffs on China is a mistake on top of a mistake.”
So, what’s going on? How much tariff is each country imposing on the other? And what happens if neither country doesn’t back down? We take a closer look.
US-China’s ‘tariff for a tariff’ war
Last week, on April 2, US President Donald Trump imposed a 34 per cent duty on China as part of his ‘ Liberation Day ’ announcement. This was in addition to the 20 per cent the US had already imposed on Beijing earlier — taking the total number up to a whopping 54 per cent.
Following his announcement, many countries rushed to negotiate with Trump on the issue of tariffs, with countries like Vietnam, which was slapped with a 46 per cent tariff, offering to remove all levies on US products.
However, China wasn’t one of them. On April 4, the Asian giant announced that it would impose a 34 per cent tax on all US imports next week, the strongest response yet from Beijing to the American leader’s trade war.
China also suspended imports of sorghum, poultry and bonemeal from six US companies, added 27 firms to lists of companies facing trade restrictions, and launched an anti-monopoly investigation into DuPont China Group Co, a subsidiary of the multinational chemical giant.
This prompted US President Trump to post on his social media platform, “China played it wrong, they panicked — the one thing they cannot afford to do.”
And on Monday (April 7), Trump further ratcheted the tariff war by giving Beijing one day’s time to withdraw their levies or else he would add another 50 per cent duty on Chinese imports — taking the total tariff to a whopping 104 per cent.
In a Truth Social post on Monday, Trump pointed out he previously warned any retaliation would be “immediately met with new and substantially higher tariffs, over and above those initially set.”
“Therefore, if China does not withdraw its 34 per cent increase above their already long-term trading abuses by tomorrow, April 8th, 2025, the United States will impose additional tariffs on China of 50 per cent, effective April 9th,” he added. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
But Trump’s threat seems to have no effect on the Dragon. The Asian giant said it would “ fight to the end ” and take countermeasures against the United States to safeguard its own interests.
“The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate,” the ministry said. “The US threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US. China will never accept this. If the US insists on its own way, China will fight to the end,” said Beijing’s Commerce Ministry.
China calling Trump’s bluff
China’s refusal to back down in this tariff war, analysts believe, is extreme and far exceeded their expectations.
According to analysts, China’s decision to levy such heavy tariffs on Washington is the tactical result of intensive planning for this scenario amid worsening trade tensions, and China being less dependent on the American market than when Trump ignited the trade war in 2018.
“A new trade war does not come as a big surprise to China,” Larry Hu, chief China economist at investment bank Macquarie, told South China Morning Post, adding that China’s swift retaliation, rather than de-escalation, pointed to both Beijing’s preparedness and the likelihood that it does not intend to be rushed into negotiations with Washington.
Even Eurasia Group analysts wrote that the decision to levy such harsh counter-tariffs was a way for the world’s second-largest economy to flex its muscle. “Strong, symmetric, tit-for-tat tariff retaliation is a precondition for Beijing to come to the negotiating table. President Xi Jinping cannot engage in talks from a position of relative weakness,” wrote the Eurasia Group analysts.
Ryan Hass, a senior fellow at the Washington-based Brookings Institution think tank, also noted that “many (People’s Republic of China) counterparts have argued (the) US is making a mistake that will undermine its own global standing”.
Implications of a China-US trade war
With both countries refusing to back down, it seems an inevitable trade war will ensue between the world’s two largest economies, causing panic at the markets.
And China, it seems, is ready for it. Chinese officials in recent weeks are attempting to project Beijing as an alternative champion of a globalised economy as well as a stable economic partner for business.
“As the world’s second-largest economy and the second-largest consumer market, China will only continue to open its doors wider, regardless of the changing international landscape,” China’s Foreign Ministry said in a statement on Saturday.
Experts also noted that China is sending a message to the world — one that others may agree to, leading them to align with the Asian country. As Liu Zhiqin, senior researcher at Chongyang Institute for Finance Studies in Renmin University of China, told CCTV, “China is sending a significant message to the world: we cannot back down or tolerate US bullying, as tolerance ultimately leads to more bullying.”
Moreover, countries may have little choice but to look to strengthen ties with China if US tariffs, which hit American allies as well as rivals, become the new normal.
It’s not hard to fathom that these ‘tit-for-tat’ tariffs will hurt both countries — the question is who will blink first. As _The Time_s wrote, “Trump is forcing a trial of strength with a rival not known for submission and the world can only wait to see if the No 2 economic power bows to No 1, with unpredictable and dangerous consequences if this stand-off continues.”
With inputs from agencies
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