China Vows to ‘Fight to the End’ Against Trump’s Tariffs as Europe Plans Counterattack

China Vows to ‘Fight to the End’: In this ongoing global trade war propelled by the tariffs imposed by President Donald Trump, China has exhibited a willingness to push back against the tariffs that already defined markets, aggravated diplomatic relations, and tossed a threat into the balance of global economic stability.

The Chinese side denounced what they termed "blackmail" by the U.S. after Trump said he would increase tariffs on such goods to more than 100 percent beginning Wednesday. This was to punish Beijing for imposing reciprocal tariffs against those Trump unveiled last week - a forceful tit-for-tat escalation that has crushed hopes for a negotiated settlement.

"The US side's threat to escalate tariffs against China is a mistake on top of a mistake," China's commerce ministry said in a blistering statement. "If the US insists on having its way, China will fight to the end."

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Having taken this hard stance, a 180-degree change from its previous emphasis on dialogue indicates the onset of a new chapter in the economic confrontation between the two largest economies in the world.

The Communist Party's flagship newspaper declared Monday that China "no longer clings to illusions" of a deal; however, this thin window remains open for possible negotiations.

Fallout of Trump's tariffs

The fallout from Trump's tariffs, declared on April 2, had been swift and severe. Fears of a prolonged trade standoff precipitated a stock market plunge across the world. Tuesday's partial recovery - with Japan's Nikkei closing 6 percent higher and Chinese blue chips gaining back 1 percent - only highlighted continued investor uncertainty and unrest.

European shares have jumped from their 14-month lows, while US futures have posted slight gains after a brutal run that wiped out trillions of dollars.

"There is a certain form of mourning," said Stephane Boujnah, head of Euronext, Europe's major stock exchange operator. “The United States that we had known… now resembles more an emerging market.”

Citi has revised its 2025 GDP forecast for China from 4.7% to 4.2% citing increasing external risks. Other global financial institutions, including UBS, Goldman Sachs, and Morgan Stanley, have issued similar warnings; some analysts believe that this may be the most disruptive round of tariffs since the Great Depression.

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Europe weighs counterattack

The EU, meanwhile, is fine-tuning its response. EU Commission President Ursula von der Leyen told Premier Li Qiang in a phone call he should support a "fair trading system" and proposed a joint mechanism to monitor trade diversion, which would prevent inexpensive exports from China from being direct from the U.S. to Europe.

With the EU proposing additional 25% counter tariffs on a range of U.S. goods, including soybeans and sausages as well as talk about a possible "zero-for-zero" tariff agreement with Washington, Brussels finds itself in a precarious position of striking the balance between playing hardball while avoiding alienating consumers.

Xi’s tightrope walk

Chinese President Xi Jinping faces the twofold challenge of projecting strength abroad while sustaining an economy still recovering from a housing crisis and faltering consumer demand. China has shown preliminary intentions to accelerate domestic stimulus in support of industries affected by the tariffs while simultaneously seeking new allies abroad-from Southeast Asia all the way to the European Union.

“Rather than aiming to inflict significant damage, the goal seems to be to exert pressure and encourage dialogue,” said Henry Gao, a trade law expert at Singapore Management University.

It is now part of China's strategy to not only rely on the American trade. In 2017, the figure for exports to the United States was 19% of total Chinese exports; that figure now has dipped under 15%. Formerly, the American soybean exporters were the only ones in China; today, they've lost a great deal to Brazil.

There has even been speculation among analysts that Xi's government intends to fully sever all ties with America, taking this position as it enters into what could now turn out to be a long-drawn confrontation while keeping channels otherwise open to diplomacy.

“China wants to convey to the US that it is not intimidated and is willing to stand its ground,” Gao said.

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