China’s Commerce Ministry expressed strong opposition to U.S. President Donald Trump’s threat to raise tariffs, promising to take countermeasures to protect its rights and interests.
This came after Trump announced plans to impose a 50% duty on U.S. imports from China unless Beijing removes the 34% tariff it recently imposed on American goods.
“The U.S. threat to escalate tariffs on China is a mistake on top of a mistake,” the statement said, according to a CNBC translation. “China will never accept it. If the U.S. insists on its own way, China will fight to the end.”
Last Friday, China’s Finance Ministry revealed a 34% additional tariff on all U.S. imports, effective April 10, in response to President Trump’s new 34% levies on Chinese goods.
These tariffs expand on earlier rounds of 10%-15% duties, mainly targeting U.S. agricultural and energy products.
The managing director at Teneo, Gabriel Wildau, noted that the broader scope of the tariffs reflects China’s growing pessimism about reaching a trade agreement with the U.S.
Trump’s 34% tariffs on China were added to the 20% duties implemented since February, bringing the total new tariffs on China this year to 54%.
These additional levies have raised the U.S. weighted average tariff rate on China to 65%, potentially reducing China’s economic growth by 1.5 to 2 percentage points this year, according to Morgan Stanley.
“Since China already faces more than 60% in tariff rate, it doesn’t really matter if it goes up by 50% or 500%,” said Tianchen Xu, a senior economist at the Economist Intelligence Unit, suggesting that Beijing is bracing for a “full-on” trade war with the U.S.
“China is on the defensive side, but basically the two sides are testing each other’s limit,” Xu added.
Beijing has already implemented export restrictions on critical rare earth elements, banned exports of dual-use items to a dozen U.S. entities, and added U.S. firms to its “unreliable entities list,” subjecting them to wider restrictions while operating in China.
On Tuesday, the People’s Bank of China set the midpoint rate for the onshore yuan at 7.2038 per dollar, marking the weakest level since September 2023, according to data from Wind Information.
The yuan is permitted to trade within a 2% band of this midpoint rate.
Trump has shown little indication of backing down on tariffs, despite growing pressure in financial markets and frustration even among his allies. In a post on the social media platform Truth Social on Monday, the president declared, “all talks with China concerning their requested meetings with us will be terminated!”
