China says Donald Trump’s trade war with Beijing “will end in failure” for Washington, hours after the US president announced he would increase his tariffs on the country’s imports to 125%.
China’s own 84% retaliatory tariffs on US imports came into effect on Thursday amid an escalating trade war between the world’s two biggest economies.
Beijing’s tariffs are the latest salvo against Trump, who on Wednesday announced a pause to his steepest tariffs on dozens of countries, capping them at 10% for 90 days, but excluding China from the U-turn after it refused to withdraw its retaliatory measures.
On Thursday, China’s foreign ministry said Beijing was not interested in a fight “but will not fear if the United States continues its tariff threats.
“The US cause doesn’t win the support of the people and will end in failure,” a ministry spokesperson, Lin Jian, said at a regular press conference.
Beijing’s commerce ministry was less aggressive in tone, saying “the door to dialogue is open”, and adding: “We hope the US will meet China halfway, and, based on the principles of mutual respect, peaceful coexistence and win-win cooperation, properly resolve differences through dialogue and consultation.”
Markets rebounded after Trump’s announcement of the sudden pause, following the most volatile period in financial markets since the pandemic.
Taiwan stocks soared 9.2% in early trading on Thursday. In Japan, the Nikkei 225 was up 7.2%, while in Seoul the Kospi was up more than 5%. In Australia, the ASX 200 jumped more than 6%. Hong Kong’s Hang Seng index climbed 2.69%, while the Shanghai composite index jumped 1.29%.
On Wall Street on Wednesday, the Dow index soared to nearly 8% higher, while the Nasdaq rose 12.2% to its best day in 24 years, after the announcement of the pause.
A China Daily editorial published on Wednesday night said “caving into the US pressure is out of the question for Beijing”.
The head of the World Trade Organization said on Wednesday that an escalating US-China tariff war could cut trade in goods between the two countries by 80%. Given they account for 3% of world trade, the conflict could “severely damage the global economic outlook”, Ngozi Okonjo-Iweala said.
Chinese companies selling products on Amazon were preparing to raise prices for the US or quit that market because of the “unprecedented blow” from the tariffs, the head of China’s largest e-commerce association said.
Trump’s 90-day pause maintained the blanket global 10% tariff but halted the steeper reciprocal tariffs.
In response, the European Union announced on Thursday it would also pause its new tariffs against the US for 90 days, to allow time for negotiations.
“I thought that people were jumping a little bit out of line; they were getting yippy, you know,” Trump said on Wednesday when asked why he had announced the pause.
Beijing had said earlier it would impose 84% tariffs on US products from midday local time on Thursday, put 18 US companies on trade restriction lists and bring in other countermeasures. It came after Trump’s “liberation day” announcement of a global tariff regime, which added a 34% tariff to the 20% already levied on China, prompting Beijing to announce reciprocal tariffs of 34%.
Trump warned China to withdraw them or he would respond but China refused, and the two sides embarked on a series of tit-for-tat raises. Trump pledged a levy of 104% and then 125% against Chinese imports, and left them in place while announcing a reprieve elsewhere.
“At some point, hopefully in the near future, China will realise that the days of ripping off the USA and other countries is no longer sustainable or acceptable,” Trump wrote, as he announced the latest US tariff assault on China.
Questioned by reporters, he claimed China “wants to make a deal, they just don’t know how quite to go about it. They’re proud people. President Xi [Jinping] is a proud man. I know him very well. They don’t know quite how to go about it but they’ll figure it out,” he said.
The China Daily editorial said on Wednesday: “It is not that China does not understand what the unprecedentedly high tariffs mean for its exports and the economy in general.
“Profits of export-oriented industries will take a blow and the resulting decline in manufacturing investment and consumer sentiment will dampen economic growth. But it also knows that kowtowing to the US’s tariff bullying will gain it nothing, given that it is no secret the US is now intent on cutting China out of its consumer market and reshaping the global supply chains to serve its own narrow interests.”
China appears to be approaching other countries in an apparent attempt to shore up trading agreements away from the US.
China’s commerce minister, Wang Wentao, has said in talks with his Malaysian counterpart that they are willing to work with trading partners in the Association of Southeast Asian Nations (Asean) to strengthen coordination.
He also spoke to the EU trade and security commissioner on Tuesday, saying China was willing to deepen trade, investment and industrial cooperation, and that China and the EU would immediately restart negotiations on electric vehicles.
Meanwhile, Beijing’s attempts to “join hands” with Australia – which relies heavily on China for trade but has a deep alliance with the US – were rebuffed by the country’s defence minister, Richard Marles.
“We’re not about to make common cause with China – that’s not what’s going to happen here,” Marles said. “We don’t want to see a trade war between America and China, to be clear, but our focus is on actually diversifying our trade.”
Trump has dismissed the market volatility, saying “sometimes you have to take medicine”, but appeared to waver as predictions of a US recession grew stronger.
Governments that were facing higher export tariffs welcomed Trump’s pause, but many were still affected by sector-based tariffs.
“We received the latest US announcement positively,” Japan’s chief government spokesperson, Yoshimasa Hayashi, told a regular briefing. But he added: “We continue to strongly demand that the United States reviews measures on its reciprocal tariffs, tariffs on steel and aluminium, and tariffs on vehicles and auto parts.”
EU member states had approved retaliatory 25% tariffs on up to $23bn in US goods – targeting farm produce and products from Republican states – from next week, in response to sweeping steel and aluminium tariffs imposed by Trump.
The US president announced his decision at the same time as a congressional hearing featuring Jamieson Greer, his US trade representative.
“It looks like your boss just pulled the rug out from under you,” the Democratic representative Steven Horsford, of Nevada, told Greer. “This is amateur hour, and it needs to stop.”
Agencies contributed to this report
