China braces for new U.S. tariffs totalling 104%, vows ‘fight to the end’

The United States said on Tuesday that 104 per cent duties on imports from China will take effect shortly after midnight, even as the Trump administration moved to quickly start talks with other trading partners targeted by President Donald Trump’s sweeping tariff plan.

U.S. stocks retreated on the news. Global markets had previously posted gains on hopes that Trump might be willing to negotiate down the array of country- and product-specific trade barriers he is erecting around the world’s largest consumer market.

The administration has scheduled talks with South Korea and Japan, two close allies and major trading partners, and Italian Prime Minister Giorgia Meloni is due to visit next week.

But the White House made clear that country-specific tariffs of up to 50 per cent would nevertheless take effect at 12:01 a.m. eastern time, as planned, with a global “baseline” rate of 10 per cent.

Those tariffs will be especially steep for China, as Trump has ratcheted up duties on its imports to 104 per cent in response to counter-tariffs Beijing announced last week. The growing trade war could raise prices for Canadians and consumers around the world in addition to the two superpowers.

China has refused to bow to what it called “blackmail” and has vowed to “fight to the end.”

4:07 Trump claims countries rushing to make ‘tailored deals’ ahead of midnight tariff deadline

“The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate,” China’s commerce ministry said. It called the U.S.’s imposition of “so-called ‘reciprocal tariffs’” on China “completely groundless and is a typical unilateral bullying practice.”

“The U.S. threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the U.S. China will never accept this. If the U.S. insists on its own way, China will fight to the end,” it added.

The 104 per cent tariffs include 20 per cent duties already imposed last month and related to stopping the flow of fentanyl precursors into the U.S., as well as 34 per cent “reciprocal” tariffs that were announced during Trump’s “Liberation Day” event on global trade last week.

2:16 Trump won’t pause tariffs, says Canada and Mexico ‘cheat like crazy’

Trump on Monday then threatened an additional 50 per cent tariff after China said it would match the 34 per cent levy with tariffs of its own. The White House said it was moving ahead with Trump’s threat after China did not lift its retaliatory tariffs by a noon deadline Tuesday.

Administration officials said they would not prioritize negotiations with the world’s No. 2 economic power.

“If China reaches out to make a deal he will be incredibly gracious, but he’s going to do what’s best for the American people,” Leavitt added.

1:57 U.S.-China trade war escalates: China hits back with 34% tariff on U.S.

Trump’s sweeping tariffs have raised fears of recession and upended a global trading order that has been in place for decades.

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“Right now, we’ve received the instruction to prioritize our allies and our trading partners like Japan and Korea and others,” White House economic adviser Kevin Hassett said on Fox News.

The White House said Trump instructed his trade team to create “tailor made” deals for the nearly 70 countries that have reached out for talks.

Trump’s lead trade negotiator, Jamieson Greer, told Congress that his office is trying to work quickly but is not facing a particular deadline.

“The president has been clear, again, that he’s not doing exemptions or exceptions in the near term,” Greer told lawmakers.

China is bracing for a war of attrition, and manufacturers are warning about profits and scrambling to plan new overseas plants. Citing rising external risks, Citi cut its 2025 China GDP growth forecast to 4.2 per cent from 4.7 per cent.

Three out of four Americans expect prices to rise as Trump’s tariffs kick in, according to a Reuters/Ipsos poll.

1:44 Stocks tumble as Trump signals no tariff respite

Chipmaker Micron told customers it will impose a tariff-related surcharge starting on Wednesday, while U.S. clothing retailers said they are delaying orders and holding off on hiring. Running shoes made in Vietnam that now retail for US$155 will cost $220 when Trump’s 46 per cent tariff on that country takes effect, according to an industry group.

Consumers are stocking up while they can. “I’m buying double of whatever – beans, canned goods, flour, you name it,” Thomas Jennings, 53, said as he pushed a shopping cart through the aisles of a New Jersey Walmart.

Stock markets found a firmer footing on Tuesday after a gut-wrenching few days for investors which prompted some business leaders, including those close to Trump, to urge the president to reverse course.

European shares bounced off 14-month lows after four straight sessions of heavy selling, while global oil prices steadied after falling to four-year lows.

Wall Street’s main indexes had posted gains earlier in the day, but fell after the White House said the tariffs on China would take effect.

1:55 China strikes back as stocks slide after worst day since 2020

On the streets of Beijing, people said they found it hard to keep track of all the announcements, but expressed belief in their country’s ability to weather the storm.

“Trump says one thing today and another tomorrow. Anyway, he just wants benefits, so he can say whatever he wants,” said Wu Qi, 37, who works in construction.

Others were less sanguine. Paul Wang, 30, who sells stainless accessories, including necklaces, bracelets and tongue studs to Europe, said the European market was now more important after the extra U.S. 50 per cent tariffs and he would be watching to see which other firms in his field would be competing in that space.

Jessi Huang and Yang Aijia, whose companies import chemicals from the U.S., said the tariffs, including potential Chinese retribution, could force them to close up shop.

“It would be very hard and very likely to have a layoff, maybe even closing,” Huang said. “I might not be able to find another job if I get laid off.”

5:55 Trump says US being ‘looted’ by other nations is justification for new ‘reciprocal’ tariffs

China still has a range of options to strike back at Washington, experts said, including suspending co-operation on combating fentanyl, placing higher quotas on agricultural products and going after the U.S. trade in services in China, such as finance and law firms.

U.S. total goods trade with China was an estimated $582 billion in 2024, making it the top trader in goods with the U.S. The 2024 deficit with China in goods and services trade was between $263 billion and $295 billion.

Foreign Ministry spokesperson Lin Jian appeared to give short shrift to talk of dialogue with the Trump administration.

“I don’t think what the U.S. has done reflects a willingness for sincere dialogue. If the U.S. really wants to engage in dialogue, it should adopt an attitude of equality, mutual respect and mutual benefit,” Lin said.

In Hong Kong, where stocks were slightly higher Tuesday, Chief Executive John Lee blasted the latest U.S. tariffs as “bullying,” saying the “ruthless behavior” has damaged global and multilateral trade and brought great risks and uncertainties to the world.

Lee said the city would link its economy closer to China’s development, sign more free trade agreements, attract more foreign companies and capital to Hong Kong, and support local enterprises in coping with the impact of the tariffs.

— with files from The Associated Press and Global News