^{The Chinese foreign ministry spokesperson, Lin Jian, said ‘exerting extreme pressure on China is the wrong target’ amid China’s strongest criticism of Donald Trump since his inauguration. Photograph: Tingshu Wang/Reuters}

In a significant escalation of trade tensions, China has declared its unwavering intention to counteract the United States' recent tariff threats. This development follows U.S. President Donald Trump's announcement of an additional 50% tariff on Chinese imports, intensifying the ongoing trade conflict between the world's two largest economies.​

U.S. Tariff Escalation and China's Firm Response

On April 7, 2025, President Trump announced his plan to impose an extra 50% tariff on Chinese goods unless Beijing retracts its 34% retaliatory tariffs implemented the previous week. This move would elevate the total U.S. tariffs on Chinese imports to a staggering 104%, marking an unprecedented level in the bilateral trade dispute. In response, China's Ministry of Commerce expressed strong opposition, stating, "If the U.S. insists on its own way, China will fight to the end." ​

Global Market Repercussions

The escalating tariff war has sent shockwaves through global financial markets. Major indices have experienced significant declines:​

• Dow Jones Industrial Average: Fell by 0.9% on April 7, reflecting investor apprehension.​
• FTSE 100: Dropped by 1.2%, indicating concerns over international trade stability.​
• DAX: Decreased by 1.5%, mirroring broader European market anxieties.​
• CAC 40: Declined by 1.3%, underscoring the pervasive impact of the trade tensions.​
• Hang Seng Index: Experienced a 2% drop, highlighting the immediate effects on Asian markets.​

These downturns underscore the global economic community's unease regarding the potential ramifications of a full-scale trade war. ​

International and Domestic Criticism

President Trump's tariff strategy has faced criticism both domestically and internationally. Key U.S. allies, including Israel and Japan, have expressed concerns about the escalating trade barriers. Domestically, business leaders like Elon Musk and hedge fund manager Bill Ackman have voiced apprehensions about the adverse effects on American industries and consumers. Despite this, Trump remains resolute, stating that all talks with China concerning their requested meetings will be terminated if the tariffs are not withdrawn. ​

China's Countermeasures and Economic Implications

China has pledged to implement necessary countermeasures to safeguard its economic interests. Potential actions include:​

• Halting Purchases of U.S. Agricultural Products: A move that could significantly impact American farmers.​
• Expanding Export Controls: Particularly on essential materials like rare earth elements, crucial for various U.S. industries.​

Economists warn that the cumulative effect of these tariffs could reduce China's economic growth by approximately 1.5 to 2 percentage points this year. The People's Bank of China has responded by setting the midpoint rate for the onshore yuan at 7.2038 per dollar, the weakest level since September 2023, signaling potential currency devaluation as a countermeasure. ​

Outlook: Prolonged Trade Conflict Anticipated

As both nations adopt increasingly entrenched positions, the prospect of a swift resolution diminishes. Analysts predict that the trade war may persist, with negotiations unlikely in the immediate future. The global economic landscape remains precarious, with businesses and consumers bracing for the extended impact of these escalating trade tensions.

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