China warns of retaliatory measures if US pushes 100% tariffs
Beijing has warned Washington that it will take resolute measures to defend its interests if President Donald Trump proceeds with plans to impose 100% tariffs on Chinese imports. The warning comes as investors brace for renewed volatility in global markets amid escalating trade tensions between the world’s two largest economies.
Official responses frame tariffs as harmful and avoidable
A spokesperson for China’s commerce ministry condemned the prospect of high tariffs, saying, “Wilful threats of high tariffs are not the right way to get along with China.” The comments, carried by Xinhua, stressed that China does not seek a confrontation but will not shy away from defending its interests if the United States insists on the path of punitive measures.
“If the United States insists on going the wrong way, China will surely take resolute measures to protect its legitimate rights and interests,” the ministry added, reiterating Beijing’s stance as talks appear unsettled and the tariff threat looms over the trajectory of bilateral relations.
Context: tariffs, export controls, and ongoing market jitters
The exchange comes after Trump accused China of planning “very hostile” moves to restrict exports of critical rare-earth materials used across U.S. industry. In response, China announced export controls on several rare earth elements—holmium, erbium, thulium, europium and ytterbium—stressing that these measures are not outright bans and remain subject to import approvals for civil use.
Analysts note that the measures align with a broader strategy to curb American access to sensitive technology amid a continuing crackdown on the use of foreign affiliates to bypass export controls. The aim, officials say, is to safeguard national security and strategic industries, though markets fear a broader trade war could dampen global growth.
Markets react with caution but no confirmed retaliation yet
Trading floors across Europe and the U.S. experienced notable volatility in the immediate aftermath of Trump’s tariff threat. The UK’s FTSE 100 dropped on Friday, while U.S. stock indices faced sharp declines at the session close. Bitcoin initially slid before rebounding as Beijing held its course without immediate retaliation, leaving some observers to speculate on the likelihood and timing of any Beijing response.
Market commentary: is this a credible threat or a bargaining tactic?
Industry analysts described the tariff threat as a possible “escalate to de-escalate” tactic often used by Trump. Michael Brown, a senior research strategist at Pepperstone, noted that the real question is whether the 100% tariff threat represents a credible policy option or a political signal aimed at extracting concessions. As both sides position themselves, investors are watching for signals about the potential for a negotiated outcome or further escalation that could upend supply chains and weigh on global growth.
What to watch next
Key indicators to monitor include any formal tariff proposals, the scope of export controls on strategic materials, and official statements from Beijing and Washington about potential negotiations. The coming weeks are likely to reveal whether this episode is a temporary bargaining tactic or the opening salvo of a more prolonged standoff that could redefine U.S.-China trade dynamics.
