Beijing warns of retaliation measures against countries reaching trade agreements with the United States at the expense of China’s interests.
In its latest response to the sharply rising US tariffs, China’s Commerce Department said in a statement that Beijing “respects the efforts of all parties to resolve trade disputes with the US through equal consultations.” However, China does not accept US-led trade transactions that harm its interests, and is “decisively and confrontationally” in order to protect its rights and interests.
In a statement, China described US tariffs as “unilateral bullying” in international trade, adding that “if it regresses to jungle laws where strong prey of people with weak international trade will become victims.”
Last week, the Trump administration reportedly planned to pressure US trading partners to limit transactions with China in ongoing tariff negotiations. Countries with close trade ties with China could face so-called secondary tariffs.
Meanwhile, Chinese President XI visited major Southeast Asia trading partners, including Vietnam, Malaysia and Cambodia, last week on their first overseas trip of the year. The visit was “determined support for China’s new driving force to strengthen regional stability and prosperity, and regional economic integration as global protectionism and unilateral unilateral integration,” the state news agency reported.
Non-tariff trade tensions
The tariff war appears to have peaked between the US and China. So far, the US has imposed a total of 145% obligation on Chinese products, suspending mutual tariffs on other countries. China has responded with a 125% tariff on US goods, calling it “ignoring” any further increases, calling it a “meaningless number game.” Trump also suggests there is no possibility that there will be further tariff hikes, citing concerns that additional measures will stall trade between the two countries.
However, both sides are strengthening trade tensions through non-tariff measures. China recently imposed export restrictions on a wide range of important minerals targeting the US, particularly the US. A few days later, Trump signed an executive order to investigate the imports of critical minerals, saying, “The critical minerals, including rare earth elements, are the form of processed minerals, the critical raw materials and critical production inputs needed for economic and national security.”
In addition to the escalation, the Trump administration announced the fees for Chinese-made vessels docked at US ports last Friday. The decision, revealed by the US Trade Representative (USTR), follows a year-long investigation first launched under the Biden administration.
President Trump has repeatedly shown that China will approach the US to sign a trade deal, but there is no clear indication that a deal from Beijing is imminent.
Euros and gold will skyrocket as shelters surge
Trade tensions between the US and China continued to destabilise global markets during Monday’s Asian session. While most western stock exchanges remained closed for Easter holidays, risk aversion once again dominated market sentiment. Shelter assets such as gold and euros have skyrocketed. Meanwhile, the US dollar weakened further, with US stock futures extending losses.
From 5:50am, COMEX gold futures rose 1.8% per ounce to $3,389, while Spot Gold rose 1.4% per ounce to $3,376. The EUR/USD pair exceeded 1.50 for the first time since November 2021. Other shelter currencies, including the Japanese yen and Swiss franc, have also been significantly strengthened against the dollar.
