China warns of “countermeasures” in response to U.S. tariff threats
China Announces Retaliation Measures Against U.S. Tariffs
On Tuesday, China announced it would take "countermeasures" in response to any new increase in tariffs imposed by the United States, following President Donald Trump’s threat to apply an additional 50% tax on Chinese imports.
Last Wednesday, Donald Trump launched a tariff offensive against several countries, including a new 34% tax on Chinese products. In retaliation, Beijing imposed equal 34% tariffs on American goods on Friday.
On Monday, Trump threatened to escalate the pressure by raising tariffs to 50% if China did not withdraw its retaliatory measures. The Chinese Ministry of Commerce expressed firm opposition to any increase in tariffs by the United States, emphasizing its commitment to respond "resolutely" to any escalation of trade tensions with Washington.
"If the United States persists, China will resolutely respond with countermeasures to the end," the ministry stated, as reported by the Xinhua news agency.
Simultaneously, the People’s Bank of China announced it would provide refinancing support if necessary, in order to defend the stability of the country’s capital markets as authorities try to mitigate the fallout from the increasingly intense trade war between the two largest economies in the world.
On Monday, the Hang Seng Index on the Hong Kong Stock Exchange experienced its largest drop since the Asian financial crisis of 1997, plummeting by 13.22%, erasing all gains made during the first quarter of 2025. Chinese markets were also affected, with Shenzhen seeing a decline of 9.66% and Shanghai dropping by 7.34%.
In an effort to stabilize the markets, Central Huijin, a subsidiary of the China Investment Corporation (CIC), intervened on Monday afternoon and announced on Tuesday its intention to continue purchasing exchange-traded funds (ETFs).
On Tuesday, Chinese markets showed a slight rebound. The Hang Seng opened up by 1.7%, reaching 20,157.52 points. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, also opened up by 0.24%, while Shenzhen’s ChiNext technology index gained 1.68%. However, the Shanghai Composite Index remained stable, experiencing a minor decline of 0.07%.
