Hours after Donald Trump threatened to impose additional 50 per cent tariffs on China, Beijing pledged to retaliate, in a tit-for-tat trade war with the US President, vowing to fight tariffs “to the end”. “The US threat to escalate tariffs against China is a mistake on top of a mistake, which once again exposes the US’s blackmailing nature,” China’s Commerce Ministry said on Tuesday. “If the US insists on its own way, China will fight to the end.” The ministry also said there were “no winners in a trade war”. US stocks were mixed during a volatile trading session on Monday, as Mr<a href="https://www.thenationalnews.com/tags/donald-trump/" target="_blank"> Trump</a> threatened to impose a new 50 per cent tariff on China, despite fears that his trade agenda will deliver an <a href="https://www.thenationalnews.com/business/economy/2025/03/11/trump-doesnt-foresee-a-recession-as-us-stocks-continue-sell-off/" target="_blank">economic downturn</a>. “If China does not withdraw its 34 per cent increase above their already long-term trading abuses by tomorrow, April 8, 2025, the United States will impose additional tariffs on China of 50 per cent, effective April 9,” Mr Trump wrote on social media. He imposed another <a href="https://www.thenationalnews.com/news/us/2025/04/02/donald-trump-global-tariffs/" target="_blank">34 per cent duty on Chinese imports</a> last week – set to go in effect Wednesday – as part of a broader tariff announcement that included a universal 10 per cent levy on all countries and harsher penalties for dozens. He has also placed a separate 20 per cent levy on China related to fentanyl trafficking. The Dow Jones Industrial Average fell 349.26 points, or 0.91 per cent, after falling by more than 1,700 points earlier in the day. The S&P 500 closed 0.23 per cent lower after briefly entering bear market territory, while the Nasdaq Composite was up 0.10 per cent. The small-cap Russell 2000 slid 0.92 per cent. Stocks briefly surged during morning trading on a false report that Mr Trump was considering pausing the tariffs by 90 days. The yield on the 10-year Treasury gained about 21 basis points to 4.21 per cent, while the price of gold fell 1.19 per cent to $2,999.10 an ounce. Global markets have been in free fall since Mr Trump unveiled the tariffs last week. His universal tariff took effect last Wednesday, while the higher “retaliatory” tariffs are due to start on Wednesday this week. That has led to fears among investors of a recession and weakening business investment but an unrepentant Mr Trump defended the imposition of tariffs, saying “sometimes you have to take medicine to fix something”. JP Morgan Chase chief executive Jamie Dimon warned of the inflationary pressures the tariffs are expected to cause. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he wrote in his annual letter to shareholders. Goldman Sachs raised its recession probability from 35 per cent to 45 per cent on Sunday night. Analysts said “we expect to change our forecast to a recession” if most of the April 9 tariffs do take effect. Meanwhile, <a href="https://www.thenationalnews.com/tags/uk/" target="_blank">Britain</a>'s FTSE 100 dropped by 4.38 per cent, in a sell-off that began as soon as markets opened on Monday. <a href="https://www.thenationalnews.com/tags/germany/" target="_blank">Germany</a>'s Dax index was down 4.13 per cent and <a href="https://www.thenationalnews.com/tags/france/" target="_blank">France</a>’s CAC 40 dropped 4.78 per cent. The Stoxx Europe 600 Index closed 4.5 per cent lower, extending losses after its biggest weekly decline since March 2020. All 20 sectors in the Stoxx 600 fell, with bank, energy and insurance shares among the biggest losers. The global losses are a “wake-up call” that show there would “only be losers” at the end of any trade war, the German government's chief spokesman Steffen Hebestreit said on Monday. “We must now act smartly and act clearly to avoid … escalating a trade war,” he said. Spain's Economy Minister Carlos Cuerpo said the EU should be open to all forms of retaliation. “We have the proper tools, the necessary tools to respond, so none of them should be discarded at this point,” he told Bloomberg television. “We’re open to negotiations, we’re open to trade, but we will not be naive.” In a new research note, a group of analysts for Deutsche Bank said investors were pricing in a “growing probability of a US recession”. Defence stocks, one of the best-performing industry groups this year, led the drop in Europe as investors built cash by selling winners. Rheinmetall lost 10 per cent and Hensoldt tumbled 12 per cent.
