China Responds To US As Trump Slaps 104% Tariffs On Beijing: 'Capable Of Fully Offsetting Any External Shock'

China and the United States inched closer to a full-scale trade war on Tuesday, as US President Donald Trump imposed a staggering 104 per cent tariff on all Chinese imports.

Locked in a high-stakes standoff, both powers remained defiant, with Beijing pledging to resist America's "aggression to the end."

Photo Credit: AP/PTI File Photo

President Trump had initially announced a 34 per cent additional tariff on Chinese goods. But following Beijing's retaliatory move to mirror that tariff on US products, Washington swiftly escalated with another 50 per cent duty.

Including earlier tariffs imposed in February and March, the total increase on Chinese imports under Trump's second term now amounts to 104 per cent.

China's Response

Beijing condemned the move as blackmail, declaring its intent to "fight it to the end."

In a phone call with European Commission President Ursula von der Leyen on Tuesday, Chinese Premier Li Qiang said the country is capable of "fully offsetting" any negative external shocks, and remained confident in "maintaining sustained and healthy economic development" in 2025, despite Washington's latest actions.

Li, widely regarded as President Xi Jinping's second-in-command, said that China's macroeconomic strategy for 2025 had already factored in such uncertainties. He went on to criticise the US measures as "unilateralism, protectionism and economic coercion", claiming the move harms not just China, but the global trading system.

"Protectionism leads nowhere - openness and cooperation are the right path for all," Li told von der Leyen, according to a Bloomberg report.

The US market continued to tumble on Tuesday as Trump held firm, undeterred by the latest downturn on major American indices.

The China-EU call took place just hours before both economies were to be affected by Trump's reciprocal tariffs, with Europe also bracing for an additional 20 per cent levy.

Trump's Trade War Intensifies

The global economy has been shaken since Trump's baseline 10 per cent tariffs came into effect over the weekend. The tariffs sparked a sharp sell-off in markets and heightened fears of a worldwide recession. Additional duties on goods from dozens of countries are set to kick in from Wednesday.

Trump defended his policy, claiming it would help restore America's manufacturing strength by compelling companies to relocate back to US soil. However, many economists and industry leaders have expressed scepticism over how fast, or whether, such a shift can realistically happen. They warn that the tariffs will likely drive up prices and worsen inflation.

Still, Trump boasted on Tuesday: "The United States is taking in almost $2 billion a day from tariffs."

Global Retaliation

With Trump standing firm, Canada announced its own tariffs on US auto imports, effective Wednesday.

The European Union, long criticised by Trump for its tariff policies, is also preparing a response to the newly imposed 20 per cent duties. French President Emmanuel Macron urged Trump to reconsider, adding, "If the EU must respond, so be it."

In retaliation for previous US steel and aluminium tariffs, the EU is readying levies of up to 25 per cent on US exports, including soybeans and motorcycles, according to a document obtained by AFP.

"Tailored Deals" in the Works?

President Trump said his administration is working on "tailored deals" with specific trading partners. The White House noted it would prioritise allies such as Japan and South Korea.

Trump's top trade adviser, Jamieson Greer, told the Senate that Argentina, Vietnam, and Israel had shown willingness to reduce their own tariffs.

Nevertheless, Trump ruled out any change of direction, despite China's retaliation and mounting criticism at home.