Beijing promises to "fight to the end" against Trump's threat of a 50% additional tariff.

In response to Donald Trump's threat of an additional 50% customs duty, China pledged to "fight to the end" while taking steps to stabilize the stock markets after a sharp decline.

Following U.S. President Donald Trump's threat to impose a 50% additional customs duty on all goods imported from China, Beijing announced it would "fight to the end." The trade war between the world's two largest economies intensified, with both sides showing little inclination to negotiate. Last Wednesday, Trump had announced new tariffs that included a 34% import tax on Chinese goods. In response, China imposed a 34% customs duty on U.S. goods two days later. On Monday, Trump warned that he would impose additional tariffs if China did not withdraw its retaliatory tariffs. In a social media post, Trump stated, "If China does not withdraw the 34% increase it has imposed on long-standing trade violations by tomorrow, by April 8, 2025, the U.S. will impose an additional 50% customs tariff on China effective April 9." If this decision comes into effect, China could face a total customs duty of 124%, including the current 20% U.S. customs duty, the recently announced 34% customs duty, and the additional 50% customs duty. In response, the Chinese Ministry of Commerce said, "The threat of the U.S. increasing tariffs on China is a mistake on top of a mistake," and added, "If the U.S. insists on its own way, China will fight to the end." The ministry called on the U.S. to resolve the differences through equal dialogue based on mutual respect. Previously, Trump had told Israeli Prime Minister Benjamin Netanyahu that while he was open to negotiations, he did not intend to suspend the planned tariffs. However, he reiterated his threat to impose a 50% additional customs duty on China. Trump also stated at a press conference that he would not accept the EU's proposal for zero tariffs on cars and industrial goods. "The European Union has treated us very poorly. They will have to take their energy from us because they need it. They can buy it, and we can bring in $350 billion in a week." The EU abandoned its plan to impose a 50% retaliatory customs duty on American whiskey and instead proposed a 25% customs duty on some U.S. goods as a countermeasure to the 25% import tax Trump imposed on steel and aluminum.

Asian markets rebounded from recent market turbulence with purchases from the lows following heavy selling last week. Hopes regarding customs duty negotiations between the U.S. and its trade partners also fueled the rally. Japan's benchmark index, the Nikkei 225, rose more than 6% at the open after falling to an 18-month low on Monday. Following a phone conversation between Japanese Prime Minister Shigeru Ishiba and President Trump on Monday, Japan will meet with U.S. Trade Representative Jamieson Greer on Wednesday. China's Hang Seng Index rose as much as 3.7% before paring gains as state funds intervened to support Chinese stocks. Investors also increased their bets on further stimulus measures to be implemented by Beijing. China's five-year interest rate swaps fell to their lowest level since 2020, signaling further easing of monetary policy. The People's Bank of China pegged the Chinese Yuan against the U.S. dollar at its weakest level since September 2023 to support exports. Additionally, Australia's ASX 200 index recovered by 1.9%, boosted by mining shares, while South Korea's Kospi index showed a slight uptick. U.S. stock futures also rose, with all three indices, including the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite, increasing by more than 1%. The broad recovery in global stock markets will trigger similar movements in European stocks after three days of declines. However, analysts remain skeptical about the sustainability of the recovery. Michael Brown, a senior research strategist at financial services company Pepperstone, wrote in a note, "Unless there is a decisive policy change, I wouldn't bet on a lasting rebound."