China vowed on Tuesday to “fight to the end” if President Donald Trump follows through on a threatened 50% tariff hike, rejecting calls to drop its countermeasures and setting the stage for a high-stakes standoff between the world’s top two economies.
If neither side backs down, total new U.S. levies on Chinese goods this year could rise to 104% by Wednesday, putting pressure on Beijing to respond as Chinese President Xi Jinping prepares to meet Spanish Prime Minister Pedro Sanchez ahead of a tour of Southeast Asia with global supply chains in jeopardy.
But with Trump’s previous tariff increases already squeezing Chinese exporters’ margins to the point of suffocation, further hikes would only serve to underscore Washington’s appetite for brinkmanship and its desire to cut China out of the world’s biggest consumer market as a matter of principle, analysts say.
“The U.S. 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,” China’s commerce ministry said in a statement. “If the U.S. insists on having its way, China will fight to the end.”
Trump said he would impose the additional 50% duty on U.S. imports from China on Wednesday if Beijing did not withdraw the 34% tariffs it had imposed on U.S. products last week.
Those Chinese levies had come in response to 34% “reciprocal” duties announced by Trump, which were in addition to 20% he imposed earlier this year, and result in the average U.S. tariff on Chinese goods rising to 76%.
“If the tariffs keep going up and up, it becomes a battle of wills and principles rather than economics,” said Xu Tianchen, senior economist for China at the Economist Intelligence Unit.
“Since China already faces a tariff rate in excess of 60%, it doesn’t matter if it goes up by 50% or 500%,” he added.
China has stepped up efforts to shield its economy from global market turmoil following Trump’s “Liberation Day” announcement, with several state holding companies committing to increase share investment, a slew of listed companies announcing buybacks, and the central bank pledging liquidity support for fund Central Huijin after it intervened to support sinking stocks.
But there is no shying away from the fact that Trump’s affinity for tariffs risks de-railing the largely export-led economic recovery that has been underway in China since the end of the COVID pandemic, unless exporters can pivot quickly to other markets.
“Once its passed the 35% mark, the tariffs actually already wipe out the entire profit of the export sector,” said Dan Wang, director, China, at Eurasia Group.
“After that, China shouldn’t export to the U.S. at all. It could be 1,000%, but since there is no trade, there is no harm.”
“Europe is and will be the most profitable market for China now,” she added.
Xi is expected to meet Spain’s Prime Minister on Friday, with finding a resolution to trade tensions between Beijing and Brussels over China’s electric vehicle exports likely on the agenda, along with Trump’s broader tariff onslaught.
The Chinese leader will then visit Malaysia, Vietnam and Cambodia, three economies that gained from Chinese manufacturers relocating to avoid U.S. sanctions during Trump’s first term but which now face steep levies of their own.
© Thomson Reuters 2025.
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