China vows to ‘fight to the end’ after Trump threatens 50% tariffs

China has strongly warned that it will “fight to the end” if the United States decides to go ahead with plans to raise tariffs, a move that threatens to ignite a major trade confrontation between the world’s two largest economies.

In a new development in the escalating trade war, the Chinese Ministry of Commerce announced on Tuesday that it would not stand idly by in the face of former US President Donald Trump’s threats to impose additional tariffs of up to 50% on Chinese imports.

A ministry spokesperson said, “If the US continues to impose tough tariff measures, China will respond with resolute countermeasures to defend its interests and rights”.

He added, “If Washington chooses to pursue its unilateral path, Beijing is prepared to fight to the end,” according to the Financial Times.

This warning comes at a critical time, as Washington prepares to implement a new round of reciprocal tariffs on dozens of countries starting April 9, raising concerns about the trade dispute expanding and its impact on the global economy.

This escalation was accompanied by Trump’s announcement of a 10% tariff across the board during what he described as “Liberation Day celebrations,” which caused severe turmoil in global financial markets and reignited talk of the possibility of the global economy entering a recession.

Amid this turbulent climate, the yuan’s exchange rate fell below the 7.2 mark against the dollar for the first time since September 2023, indicating increasing pressure on the Chinese currency.

Meanwhile, investment funds and companies intensified stock purchases to support the local market.

In response to this turmoil the Chinese government launched a package of swift and intensive measures to bolster stability in financial markets and restore investor confidence.

However, major indices on Chinese stock exchanges, such as the Shanghai Composite Index, the Shenzhen Composite Index, and the ChiNext Index, fell by more than 7% in Monday’s trading.

In an attempt to contain the decline, a number of state-owned companies declared a “general alert,” increasing their stakes in exchange-traded funds, a move aimed at boosting long-term confidence in the capital market.

The People’s Bank of China, which is the central bank of China, also intervened by injecting fresh liquidity through re-lending facilities, according to the official Chinese news agency, Xinhua.

For its part, Huijin Central Investment Co., Ltd., a government investment entity, confirmed that it has doubled its investments in exchange-traded funds, indicating that it will continue this strategy to maintain market stability.

The Chinese Central Bank pledged full support for Huijin’s actions, opening the way for it to increase its investments in equity indices, and affirming its readiness to provide the necessary funding if needed.

In the same vein, other major companies, such as Chengdu Group, China Reform Holdings, and seven subsidiaries of China Merchants Group, have expanded their equity holdings or announced plans to repurchase shares at an accelerated pace.

The National Financial Regulatory Authority also issued new directives aimed at raising the ceiling on insurance fund investments in the stock market, with greater support directed toward strategic sectors and modern, value-added industries.

Analysts believe these simultaneous steps send a strong message underscoring China’s determination to defend the stability of its financial markets and confront any external pressures that might threaten investor confidence or impact economic growth.