Trump tariffs lead to US-China tit-for-tat, global turmoil

In a striking escalation of the ongoing global trade dispute, China is attempting to build international backing in reaction to US President Donald Trump’s sharp tariff increases — though its efforts have seen limited traction as nations juggle economic interests with political alignment.

Earlier this week, the White House dramatically raised tariffs on Chinese imports to an extraordinary 125%, accusing China of engaging in unfair trade practices. In a swift countermeasure, Beijing imposed 84% tariffs on American products. This aggressive exchange signals a hardening of positions, pushing the US and China closer to direct economic confrontation, while other countries navigate the fallout.

Although Trump initially targeted several trading partners, he has since eased off most of them, offering a 90-day reprieve to promote bilateral negotiations. “Countries are lining up to negotiate,” he said Wednesday, noting the turmoil in financial markets. Still, Beijing remains defiant.

“China will fight to the end,” declared commerce minister Wang Wentao in a pointed video call with EU Commissioner Maroš Šefcovic. "The US is acting like a bully... trampling on WTO rules, global stability, and the multilateral system."

Foreign ministry spokesperson Lin Jian added, “A just cause receives support from many. The US cannot win the support of the people and will end in failure.”

China’s diplomatic efforts have largely centred on Europe. Chinese state media characterised Premier Li Qiang’s conversation with European Commission President Ursula von der Leyen as a “positive message” aimed at deepening China-EU trade ties. During the exchange, Li promised greater support for international investors and affirmed China’s intention to address global volatility through “incremental policies.”

Expanding efforts beyond Europe

Commerce minister Wang has also initiated dialogue with Southeast Asian counterparts and consulted with ASEAN member states. Meanwhile, Premier Li held meetings with business leaders to underscore China’s commitment to stability and engagement. Yet these initiatives have received mixed reactions.

Australian Prime Minister Anthony Albanese rejected suggestions of forming a collective front, remarking, “We stand on our own two feet.” Tensions between Australia and China have lingered since 2020, when Canberra’s push for an independent investigation into Covid-19’s origins prompted retaliatory trade measures from Beijing.

India appears hesitant to support China’s campaign, and even Russia — a frequent geopolitical partner — has remained notably absent from the list of countries opposing the US tariffs. Meanwhile, Taiwan, which is facing a 32% tariff from the United States, is preparing to engage Washington in talks. Foreign minister Lin Chia-lung confirmed these discussions and highlighted Taiwan’s critical role in the semiconductor industry.

In Hong Kong, China’s foreign ministry issued a strongly worded condemnation of Washington’s tactics. “A tariff-wielding barbarian… can never expect that call from China,” spokesperson Huang Jingrui wrote in an opinion piece for the South China Morning Post.

Volatile markets react

Despite the escalating tension, global stock markets rallied on Thursday following Trump’s decision to delay action for most countries. Japan’s Nikkei surged more than 9%, while Germany’s DAX rose by 7.5%. France’s CAC 40 gained 7.2%, and the UK’s FTSE 100 advanced 5.4%. In contrast, US futures dipped — the S&P 500 declined 0.4%, and the Dow Jones slipped 0.2% — as investors grappled with the broader implications.

Chinese markets posted modest gains, with caution prevailing amid threats of further retaliatory actions, including the potential restriction of US entertainment and service sectors.

What lies ahead?

Though Trump has signalled the possibility of negotiating terms on a case-by-case basis, the mood remains tense. “We will not sit idly by,” Lin warned. “China will defend its rights and resist unilateral coercion.”

With the global economy at a pivotal moment, the world now watches to see whether China’s multilateral approach or Trump’s strategy of confrontation will ultimately shape the next phase of international trade.