^{China's Foreign Minister Wang Yi attends a press conference during the ongoing National People's Congress (NPC) in Beijing on March 7, 2025. © Jade Gao, AFP}

China’s Ministry of Commerce has called on the United States to "immediately cancel" its recently imposed tariffs, warning that Beijing will take "resolute countermeasures" to defend its economic interests. This response follows President Donald Trump’s announcement of what experts are calling the most aggressive tariff hikes in a century, marking a significant escalation in global trade tensions.

The U.S. Tariff Hikes: A Breakdown

Trump’s new tariff policy introduces a universal baseline tariff of 10% on all imported goods. However, specific nations, including major U.S. trading partners, face substantially higher levies:

• China: 34%, raising the total effective tariff to 54% when combined with pre-existing duties.
• European Union: 20%.
• Vietnam: 46%.
• Taiwan: 32%.
• Japan: 24%, particularly impacting the automobile sector.
• Thailand: 36%, triggering concerns among exporters.

The sweeping measures, effective April 9, are projected to drive U.S. average tariff rates to levels unseen since the early 20th century. Analysts warn that this move could significantly slow global economic growth, with potential consequences for businesses and consumers worldwide.

China’s Fierce Rebuttal

A spokesperson from China’s Ministry of Commerce condemned the move, labeling it "a typical unilateral bullying practice" that violates international trade rules. The ministry accused the U.S. of distorting the concept of "reciprocal tariffs" based on subjective assessments, undermining global trade stability.

Beijing has vowed to respond forcefully. While officials have not yet disclosed the full scope of their countermeasures, trade experts anticipate:

• Retaliatory tariffs on U.S. imports—targeting key industries such as agriculture, technology, and automobiles.
• Regulatory actions against U.S. companies operating in China.
• A shift in supply chain strategies, encouraging Chinese firms to seek alternative markets and suppliers.

Economists predict that these measures could lead to an economic contraction of 0.5 to 1 percentage point in China’s GDP, depending on currency exchange rate fluctuations. However, Beijing is expected to introduce domestic stimulus programs to mitigate the impact.

Global Backlash Against U.S. Tariffs

The sharp tariff hikes have drawn criticism from major economies around the world, with several nations preparing their own countermeasures:

• Canada: Prime Minister Mark Carney announced that Ottawa will unveil a full set of retaliatory measures on Thursday, pledging to fight the tariffs "with purpose and force."
• South Korea: Acting President Han Duck-soo ordered emergency support measures for affected industries, particularly the auto sector, while pushing for diplomatic negotiations with Washington.
• Australia: Prime Minister Anthony Albanese called the tariffs a "poor decision," criticizing them as unfriendly trade practices but ruled out imposing reciprocal tariffs against the U.S.
• European Union: President Ursula von der Leyen stated that the EU is preparing further countermeasures if diplomatic efforts fail, signaling a potential escalation in trade disputes.
• Japan: Trade Minister Yoji Muto announced the formation of a task force to evaluate the impact of the tariffs and devise an appropriate response strategy.

Market and Economic Implications

Morgan Stanley’s chief China economist Robin Xing noted that the tariff shock for China could be "significantly higher and more pervasive" than the previous U.S.-China trade war. Meanwhile, Tai Hui, APAC chief market strategist at JP Morgan Asset Management, cautioned that the heightened trade barriers could disrupt supply chains, increase costs for U.S. businesses, and dampen investor confidence globally.

Stock markets have already reacted negatively, with indices in Asia and Europe experiencing volatility following the tariff announcement. The Dow Jones Industrial Average dropped 2.1%, while China’s Shanghai Composite Index slid 3.4%, reflecting investor concerns over escalating trade frictions.

The Road Ahead

Stephen Olson, senior fellow at the Yusof Ishak Institute, suggests that despite the heated rhetoric, both the U.S. and China will eventually be forced to negotiate. "The two sides are heading toward a high-stakes negotiation table where they’ll attempt to strike a broader deal," Olson said, though he warned that tensions are likely to rise further before any resolution is reached.

As global trade battles intensify, businesses, investors, and consumers alike will be watching closely. The coming months may determine whether this latest trade war leads to a prolonged economic standoff or a negotiated settlement that stabilizes international markets.

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