By The Sampadak Express
Tensions between the United States and China are rapidly escalating as both nations engage in a war of words backed by looming tariff threats, which could plunge the already unstable global economy into deeper turmoil.
Latest Developments:
On Thursday, US President Donald Trump implemented what he dubbed the “Liberation Day” tariffs, slapping China with higher duties on its exports to the US and imposing a minimum 10% tariff on goods from other countries. This announcement caused widespread panic in global stock markets as investor confidence plummeted.
China quickly retaliated with its own tariff increases, while other nations scrambled to negotiate with Washington to avoid further economic fallout. But Trump intensified the rhetoric on Monday, threatening even higher tariffs on China unless it withdraws its latest tariff hikes. China, however, has refused to back down.
The back-and-forth over tariffs has continued to destabilize stock markets around the world, heightening fears that this trade conflict could deepen into a full-scale trade war.
Trump’s Threats:
On Friday, China responded by imposing a 34% additional tariff on US imports, mirroring Trump’s tariff increase two days earlier. However, on Monday, Trump escalated the situation further by threatening a 50% tariff on Chinese goods unless Beijing pulls back its 34% tariff by Tuesday.
Trump warned in a post on his Truth Social network: “If China does not withdraw its 34% increase… the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.”
He also declared that any talks with China regarding the tariffs would be canceled, but negotiations with other countries would proceed.
China’s Stance:
China’s Ministry of Commerce fired back on Tuesday, calling the US actions “completely groundless” and accusing the US of “bullying” tactics. In a combative statement, China emphasized that its tariff hikes were aimed at protecting its “sovereignty, security, and development interests.” Beijing warned that it was prepared to “fight to the end” if Trump followed through with further tariffs.”
China will never accept this. If the US insists on its own way, China will fight to the end,” the statement read.
The Background:
Last week, Trump’s tariff announcements shocked markets around the world. The US imposed a baseline 10% tariff on all imports, with additional, higher tariffs on countries deemed to be unfairly taxing US goods. Lesotho, a small African nation, was hit with the highest tariff at 50%, while China saw a hefty 34% tariff imposed.
Since taking office, Trump has already levied several rounds of tariffs on China, with rates rising from 10% to 34%. Should he follow through with his new threat, Chinese imports could face an eye-watering 104% tariff.
China, for its part, has retaliated with a series of countermeasures. In March, it imposed tariffs between 10-15% on US imports and has now added a 34% tariff increase. China has also restricted exports of rare earth elements crucial for technology manufacturing and halted exports of dual-use items to some US defense companies.
Economic Impacts:
The escalating tariffs are already affecting both economies. In China, US tariffs have hit key export sectors, particularly electronics and vehicles. Meanwhile, the US faces disruptions in its agricultural exports, machinery, and pharmaceutical industries.
Experts predict that the Chinese economy could shrink by up to 2% this year due to the trade conflict. Moreover, China may further retaliate by halting US agricultural imports and tightening its grip on critical metals and minerals essential to US industries.
US stock markets have experienced volatility, with the S&P 500 dropping 0.2% and the Dow Jones Industrial Average losing 349 points (0.9%) on Monday. Although there was brief optimism following rumors that a pause on tariffs was being considered, Trump quickly denied those claims, reaffirming his stance.
Trump’s message on Monday emphasized that the US was bringing in “billions of dollars a week” from tariffs already in place, while accusing China of failing to heed his warnings.
As the tariff war intensifies, both nations appear prepared for further escalation, with little sign of a resolution. The impact on global markets, particularly in the US and China, is becoming more pronounced, and the consequences could ripple through the world economy.
