Trump: 104% levy if Beijing pushes back

China vowed Tuesday to “fight to the end” after US President Donald Trump threatened to further ramp up tariffs but the EU warned against escalating a trade war that has rocked global markets.

On the local front, Malacañang and members of the Cabinet’s economic cluster were mum on whether the meeting on the US tariffs scheduled yesterday pushed through. It was Trade Secretary Ma. Cristina Roque who earlier announced that there would be a meeting Tuesday to discuss the government’s action as the US worldwide reciprocal tariffs take effect today (Wednesday, April 9).

Beijing—Washington’s major economic rival but also a key trading partner—responded to Trump’s sweeping tariffs by announcing its own 34 percent duties on US goods to come into effect on Thursday, deepening a showdown between the world’s two largest economies.

The swift retaliation from China sparked a fresh warning from Trump that he would impose additional levies of 50 percent if Beijing refused to stop pushing back against his barrage of tariffs—a move that would drive the overall levies on Chinese goods to 104 percent.

“I have great respect for China but they cannot do this,” Trump said at the White House.

China swiftly hit back, blasting what it called “blackmailing” by the United States and vowing “countermeasures” if Washington imposes tariffs on top of the 34 percent extra that were due to come in force today (Wednesday).

“If the US insists on going its own way, China will fight it to the end,” a spokesperson for Beijing’s commerce ministry said on Tuesday.

Negotiated solution sought

The European Union sought to cool tensions, with the bloc’s chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese Premier Li Qiang.

She stressed the “vital importance of stability” for the world’s economy, urged a “negotiated solution” and emphasized “the need to avoid further escalation,” according to a readout of the call from EU officials.

The EU is weighing its own response to the 20-percent tariffs it is facing, with its biggest economies Germany and France advocating a tax targeting US tech giants.

But Brussels has also proposed an exemption from tariffs on industrial products, including cars, which Trump said Monday was not enough to account for the US trade deficit with the EU.

“The European Union has been very, very bad to us,” Trump said.

‘Economic self-harm’

Australia, for its part, said it is ready for the impact of Trump’s trade tariffs, Prime Minister Anthony Albanese said Tuesday in a first television debate before the tightly contested May 3 elections.

The US president’s “act of economic self-harm” will dampen global growth, 62-year-old Albanese said as he faced right-leaning opposition leader Peter Dutton.

The US tariffs—including a 10-percent levy on Australia—present a challenge but “no country is better prepared,” the center-left Labor Party leader told a televised town hall debate in Sydney.

Australia will be able to seize trade opportunities in the Asia-Pacific region, Albanese said.

“We’ll continue to negotiate, of course, with the United States looking for a better deal for Australia because reciprocal tariffs would, of course, be zero, because we don’t impose tariffs on US goods.”

Dutton, a 54-year-old former policeman, suggested he would show a stiffer backbone.

“The prime minister of the day should have the ability and the strength of character to be able to stand up against bullies, against those that would seek to do us harm, to keep our country safe,” he said.

Mild rebound

Trump’s tariffs have roiled global markets in the last days, with trillions of dollars wiped off combined stock market valuations in recent sessions.

Stock markets staged a mild rebound on Tuesday, with Hong Kong’s Hang Seng index rising 1.5 percent after crashing 13.2 percent the previous day in its worst performance since 1997.

Shares in Tokyo leapt after Treasury Secretary Scott Bessent suggested in a Fox News interview that Japan would get “priority” in negotiations over the US tariffs “just because they came forward very quickly.”

Scores of countries have sought talks, Bessent said, adding “through good negotiations, all we will do is see levels come down.”

European markets also clawed back some ground, with London, Paris and Frankfurt all up more than one percent in morning trade.

Trump believes the tariffs will revive America’s lost manufacturing base by forcing foreign companies to relocate to the United States, rather than making goods abroad.

But most economists question that and say his tariffs are arbitrary.

White House ‘got it all wrong’

An economist whose work was cited by Trump’s administration to justify sweeping tariffs has said officials misinterpreted the research—and the levies should have been as little as a quarter of what the White House announced.

Brent Neiman, who was a US Treasury official under previous president Joe Biden, co-authored a 2021 paper on the impact of tariffs on prices in the United States.

The paper was cited by the US Trade Representative (USTR) in a statement released last week explaining the calculations behind the major import tariffs announced by Trump that threaten to pull the global economy into a recession.

“I disagree fundamentally with the government’s trade policy and approach,” Neiman wrote in an opinion essay published by The New York Times on Monday.

Neiman said the USTR’s “biggest mistake” was misconstruing trade deficits with other countries as a definite sign of unfair practices by the other party.

Additionally, the Trump administration miscited the paper to suggest that domestic prices would only rise slightly under the new tariff regime, Neiman said in the essay, which ran with a headline saying the White House’s use of the research “got it all wrong.”

The economist said his work, which was produced with three other academics, showed that “the price paid for US imports would rise almost as much as the tariff rate.”

Their findings also suggested the “calculated tariffs should be dramatically smaller—perhaps one-fourth as large.”

Trump’s trade math has left economists scratching their heads, with former Treasury Secretary Larry Summers saying last week “this is to economics what creationism is to biology, astrology is to astronomy.”

Editor’s Note: This is an updated article. Originally posted with the headline “China vows ‘fight to the end’ as Trump warns 50% more tariffs.”