China pushes back against US 'bullying' as global stock markets tumble

As tension between the US and China seems to ratchet up over the tariff issue, China's ministry of foreign affairs issued an X post on Tuesday evening saying "the fentanyl issue is a flimsy excuse to raise US tariffs on Chinese imports".

Since US President Donald Trump took office for the second time, he has taken some decisions that have created an uproar around the world. To begin with, he imposed extra tariffs on China apart from Canada and Mexico, to which China has clearly stated that if the US wants tariff, trade or any kind of war, China will fight until the end.

In the statement posted on X, China's foreign ministry spokesman Lin Jian said, "The fentanyl issue is a flimsy excuse to raise U.S. tariffs on Chinese imports. Our countermeasures to defend our rights and interests are fully legitimate and necessary.

"The U.S., not anyone else, is responsible for the #FentanylCrisis inside the U.S. In the spirit of humanity and goodwill towards the American people, we have taken robust steps to assist the U.S. in dealing with the issue. Instead of recognising our efforts, the U.S. has sought to smear and shift blame to China, and is seeking to pressure and blackmail China with tariff hikes."

Jin also said, "Intimidation does not scare us. Bullying does not work on us. Pressuring, coercion or threats are not the right way of dealing with China. Anyone using maximum pressure on China is picking the wrong guy and miscalculating. If the US truly wants to solve the fentanyl issue, then the right thing to do is to consult with China by treating each other as equals."

Meanwhile, stock markets around the world tumbled on Tuesday after Trump announced sweeping tariffs, raising concerns about a potential global trade war. The decision to impose a 25 per cent tariff on all imports from Canada and Mexico, along with an additional 10 per cent levy on Chinese goods, sent shockwaves through financial markets.

In response, America’s three largest trading partners — Canada, Mexico, and China — prepared retaliatory measures, driven by pressure from domestic industries and the need to maintain a strong stance. Together, these three nations account for approximately 42 per cent of all imports into the US, the world’s largest economy.

As the global economy grappled with the reality of these tariffs, analysts worked to assess their potential duration. While some measures could be reversed, the tariffs on Chinese goods were expected to be more persistent, reflecting Trump’s decision to impose a lower initial rate but with a longer-term impact in mind.

“Retaliation has predictably been swift and will hit the US agriculture and auto sectors hardest in the days ahead,” Henrietta Treyz of trade consultancy Veda Partners was quoted as telling the South China Morning Post.

China has introduced sanctions on multiple American companies and imposed additional tariffs of up to 15 per cent on various U.S. imports, including wheat, corn, fruit, beef, and select soybean products.

Beijing also announced its intention to file a case with the World Trade Organization. However, analysts have dismissed this as a largely symbolic move, citing the lengthy process involved and the likelihood that the US President would disregard any ruling from the WTO.

On Tuesday, Mexican President Claudia Sheinbaum condemned the US tariffs as irrational, warning that if Washington did not reconsider, her government would introduce countermeasures on Sunday. “There is no logic, justification, or reasoning behind this decision, which will harm both our people and our economies,” she said. “No one stands to gain from this.”

Similarly, Canadian Prime Minister Justin Trudeau declared that Canada would implement a 25 per cent tariff on an additional C$125 billion (US$86.5 billion) worth of American goods within 21 days if the US failed to reverse course. While acknowledging Trump’s intelligence, Trudeau criticised the tariffs as a “seriously misguided move”.

The US president’s aggressive tariff strategy sent shockwaves through global markets, a report in the South China Morning Post reported. On Wall Street, the Dow Jones Industrial Average and the S&P 500 each closed more than 1 per cent lower on Tuesday, while the tech-focused Nasdaq declined by approximately 0.3 per cent. Quartz reported that the S&P 500 had now erased all the gains made since Trump’s election, declaring, “The Trump bump is over.”

The fallout extended beyond the US, with Germany’s DAX plummeting 3.54 per cent, Britain’s FTSE 100 losing 1.27 per cent, Japan’s Nikkei 225 falling 1.2 per cent, and Hong Kong’s Hang Seng Index dropping 0.75 per cent.

The US Chamber of Commerce, which represents over three million businesses, urged Trump to reconsider the tariffs. Meanwhile, retail giants Target and Best Buy cautioned that consumers would face higher prices if the import taxes were implemented.

Much of what happens next depends on Trump’s underlying motives, which remain difficult to predict, analysts suggested.

The President has repeatedly defended the tariffs, citing the failure of key trading partners to combat fentanyl smuggling. However, analysts questioned the validity of this justification, noting that Canada has minimal involvement in fentanyl trafficking, and both Mexico and Canada have taken steps to address Trump’s concerns, as has China.

Another explanation Trump has provided is his push to relocate manufacturing back to the US.

However, several analysts observe that Trump has imposed tariffs primarily for their political impact — allowing him to use the announcement as a rhetorical tool in his speech to Congress before eventually scaling them back.

However, South China Morning Post quoted Treyz as predicting a longer and more drawn-out battle, suggesting that Trump needs to demonstrate that tariffs generate revenue to justify his ambitious US$5 trillion tax cut proposal. “For this claim to hold, the tariffs must be implemented and remain in effect,” she explained. “That’s why we assign a high probability to their enforcement.”