China Warns of Firm Retaliation Against US Over Tariff Disputes

China has vowed to take firm and necessary countermeasures in response to the United States’ escalating tariff threats, reaffirming its commitment to defending national interests while upholding the stability of the global trade system.

Analysts said that China’s move sent a strong signal to the international community of rejecting unilateralism and joining efforts to safeguard multilateral trade rules.

They noted that Beijing retains ample policy tools to respond, including raising tariffs on US energy and agricultural imports, as well as further expanding export controls on critical minerals such as rare earth elements. These targeted actions are expected to increase pressure on Washington and could pave the way for a return to rational negotiations, they added.

“China will resolutely take countermeasures to safeguard its rights and interests, should the United States escalate its tariff measures,” the Ministry of Commerce said in a statement on Tuesday, hours after the US threatened to impose a further 50 percent tariff on China if Beijing does not withdraw its 34 percent counter-tariff.

US President Donald Trump signed an executive order on April 2 regarding the so-called “reciprocal tariffs”, imposing a 10 percent “baseline tariff” and higher rates on certain trading partners. Last week, Beijing adopted an array of countermeasures, including an additional 34 percent tariff on US imports, following decision by the US to impose an additional 34 percent tariff on Chinese imports.

“The US’ tariff escalation threat against China compounds its mistake and further exposes its nature of blackmail, which China will never accept,” the ministry said. “China will fight till the end if the US is bent on going down the wrong path.”

Analysts believe that the set of forceful and targeted countermeasures that Beijing has taken showed that it has ample tools at its disposal, especially against sectors and companies that are priorities for the Trump administration, and where China’s dependence is not significant.

The energy and agricultural sectors that Trump hopes to bolster are also the primary industries in US states such as West Virginia and Kansas. Intensifying sanctions on these sectors would therefore heighten domestic pressure on the Trump administration, said Luo Zhiheng, chief economist at Yuekai Securities.

Luo said that China can consider extending export restrictions to potentially include lighter rare earth elements like lanthanum and cerium, as the US is highly dependent on such Chinese imports.

“The trade war this time is not one that can easily be settled through concessions,” Luo said. “China must take firm and resolute countermeasures to defend its interests, which will then compel the US to come back to the negotiating table.”

The US saw widespread protests over the weekend that in part opposed the Trump administration’s aggressive tariff policies, which are seen as inflicting real economic pain on households and businesses across the country.

Steve Lamar, president and CEO of the American Apparel & Footwear Association, said in a statement last week, “To be clear, tariffs are taxes borne by the American companies that import the goods and the hardworking American families that buy those goods.”

“Tariffs will significantly increase the cost of manufacturing in the US, and, when paired with the retaliatory tariffs that will surely come, will undermine US export opportunities as well,” Lamar said.

Also See: Trump Threatens China with 50% Tariffs if Beijing Doesn’t Drop Levies

China’s potent countermeasures don’t mean that a trade war is the only way forward, as Beijing stands ready to talk with Washington.

China urges the US to immediately correct its wrongdoing, cancel all unilateral tariff measures against China, stop its economic and trade suppression, and settle differences with China properly through dialogue on an equal footing and on the basis of mutual respect, the Commerce Ministry said.

Beijing is not alone in facing the Trump administration’s “Liberation Day” tariffs. The White House has dragged its own long-standing allies into the fray, including imposing additional tariffs as high as 20 percent on imports from the European Union, 25 percent on imports from South Korea and 24 percent on imports from Japan.

“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business and as a market to invest capital,” said Bill Ackman, a hedge fund titan who endorsed Trump’s run for president.

“We will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate,” Ackman said in a post on social media platform X.

Ma Guangyuan, a senior economist, said the era of the US calling the shots and forcing countries to choose sides is over, as the US-led trade system is falling apart. However, this does not mean the end of free trade itself, as the global community still recognizes the benefits of open economic cooperation, Ma said.

“Economics will triumph over politics and free trade will overcome hegemony,” Ma added. “China can seize this chance to broaden its circle of friends and jointly foster a new trade framework on the foundation of equality, freedom and mutual benefits with other economies.”

High-ranking officials from Italy, Portugal and France, as well as the European commissioner for trade and economic security, visited China in late March. Around the same time, South Korea and Japan agreed to accelerate negotiations with China on the stalled trilateral free trade agreement.

“Our championing of free trade is not just a response to US aggression, but a strategic initiative to guide the development of the multilateral system in a direction that benefits all,” said Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

“The US’ blanket, across-the-board imposition of high tariffs this time might end up uniting all the affected economies into a shared marketplace that could potentially dwarf the size of the US market,” Mei said.

This news is sourced from China Daily and is intended for informational purposes only.