US and China are currently locked in a battle of tariffs as US President, Donald Trump announced a 90-day pause of steep reciprocal tariffs on dozens of countries except China.
Over the course of a week, Trump’s tariffs on Chinese imports have jumped from 54% to 104% and now 125% – figures that add to existing levies imposed prior to the President’s second term.
China has retaliated in kind, raising additional, retaliatory duties on all US imports to 84%.
Trump’s trade war with China sets up an historic rupture that will not only cause pain for both of these deeply intertwined economies – but add tremendous friction to their geopolitical rivalry.
Markets rebounded after Trump’s announcement of the sudden pause, after the most volatile episode in financial markets since the pandemic.
Taiwan stocks surged 9.2% in early trading on Thursday, April 10, 2025.
In Japan, the Nikkei 225 was up 7.2%, while in Seoul the Kospi was up over 5%. In Australia the ASX 200 jumped more than 6%. Hong Kong’s Hang Seng Index climbed 2.69%, while the Shanghai Composite Index jumped 1.29%.
On Wall Street on Wednesday, the Dow index soared to close nearly 8% higher while the Nasdaq rose 12.2% to notch its best day in 24 years, after the announcement of the pause.
However, Beijing has vowed to “fight to the end”. A China Daily editorial said, “caving in to the US pressure is out of the question for Beijing.”
The China Daily editorial added, “It is not that China does not understand what the unprecedentedly high tariffs mean for its exports and the economy in general.”
“Profits of export-oriented industries will take a blow and the resulting decline in manufacturing investment and consumer sentiment will dampen economic growth. But it also knows that kowtowing to the US’s tariff bullying will gain it nothing, given that it is no secret the US is now intent on cutting China out of its consumer market and reshaping the global supply chains to serve its own narrow interests.”
China Daily editorial
American journalist and China watcher, Bill Bishop, opined in his Sinocism newsletter that Trump’s decision to raise tariffs against China and pause duties for nearly 60 other countries will reinforce the worst fears about the US in Beijing.
“So will [Chinese President] Xi Jinping take a breath, wait a few days and try to arrange a call to figure out if there is a way to walk things back at least part way? Or will he decide he needs to respond one more time?
“Whatever he decides to do, Trump’s singling out of China will likely reinforce the view in Beijing that there is a coherent strategic plan to contain and suppress China, even if one does not appear to exist.”
Bill Bishop
China appears to be approaching other countries in an apparent attempt to shore up trading agreements away from the US.
China’s Commerce Minister, Wang Wentao, said in talks with his Malaysian counterpart that they’re willing to work with ASEAN trading partners to strengthen coordination.
Australia Rebuffs China’s Appeal To ‘Join Hands’ Against Trump’s Tariffs
Meanwhile, Australian Deputy Prime Minister, Richard Marles ruled out working with China to resist Trump’s tariffs after the Chinese Ambassador to the country appealed for the sides to “join hands” on the issue.
Chinese Ambassador Xiao Qian suggested in a newspaper that the two countries should work together to defend international trade.
Xiao said in an op-ed published in the Sydney Morning Herald, “Under the new circumstances, China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world.”
However, Marles said in an interview, “I don’t think we’ll be holding China’s hand.”
“We don’t want to see a trade war between America and China to be clear, but our focus is on actually diversifying our trade. We are doing a lot more in Southeast Asia, in countries like Indonesia, which is a massive potential market on our doorstep.”
Richard Marles
World governments which were facing higher export tariffs welcomed Trump’s pause, but many are still affected by sector-based tariffs.
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