The trade fight between the United States and China has gotten much more serious. On Tuesday, US President Donald Trump shocked the world by putting a 104% tariff (extra tax) on all goods coming from China. In return, China said it will not back down and is ready to “fight to the end”. This ongoing conflict is now affecting not only these two big economies but also many other countries across the world.

Trump had first added a 34% extra tariff on Chinese products. China then answered back by adding the same 34% tariff on American goods. After this, Trump increased the tariffs again by 50%. When we add these new taxes to the earlier tariffs placed in February and March, the total increase in tariff on Chinese goods under Trump’s second term is now 104%.

China hits back, calls US action ‘blackmail’

China was quick to react. It strongly criticised the US for what it called “blackmail” and promised to “fight it to the end”. During a phone call with European Commission President Ursula von der Leyen, Chinese Premier Li Qiang said that China is ready to handle these economic shocks. He also said that China remains confident about its economic growth in 2025.

Li Qiang, who is seen as President Xi Jinping’s “Number 2”, said that China has already planned its economic policies while keeping such risks in mind. He called America’s tariff action an example of “unilateralism, protectionism and economic coercion”.

Li also added that China is not just protecting its own interests but is also standing up for fair international trade rules. According to Bloomberg, he told Von der Leyen, “Protectionism leads nowhere – openness and cooperation are the right path for all.”

The call between China and the EU came just before both sides were hit with new US tariffs. Europe will now also face an extra 20% tax on its goods entering the United States.

Other countries also hit by US tariffs

Trump’s wide tariff plans are not only aimed at China. Countries like Canada, the European Union, and others are also facing new taxes. Canada said it would start taxing US car imports from Wednesday. The EU may announce its own response next week.

French President Emmanuel Macron urged Trump to rethink his decisions, saying, “So be it” if Europe is forced to respond. As a counter move to US tariffs on steel and aluminium last month, the EU is planning up to 25% taxes on American products like soybeans and motorcycles, according to a document seen by AFP.

Trump says the US is making nearly “$2 billion a day” from these tariffs. He believes that this policy will help American factories grow again by pushing companies to move back to the US. However, many economists worry that this will cause prices to go up and make things more expensive for American buyers.

Trump also mentioned that his team is working on “tailored deals” with friendly countries like Japan and South Korea. His top trade official, Jamieson Greer, told the Senate that Argentina, Vietnam, and Israel were also open to lowering their tariffs.

 

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