China has issued a stark warning to the United States, promising firm retaliation if President Donald Trump follows through on his threat to levy 100% tariffs on Chinese goods. The ultimatum from Beijing marks a dangerous new phase in the ongoing trade dispute, pushing the two economic superpowers to the brink of an all-out trade war that has already shaken global markets.
The Chinese commerce ministry squarely blamed Washington for the escalating tensions. In a statement released Sunday, a spokesperson asserted that China’s stance is consistent: “We do not want it, but we are not afraid of it.” This declaration came in response to Trump’s Friday announcement of the sweeping new tariffs and software controls, which he threatened to implement by November 1st.
The immediate fallout was felt across financial markets worldwide. Wall Street experienced a dramatic selloff, with the Dow Jones dropping nearly 900 points and erasing an estimated $2 trillion in value. The fear spread globally, with London’s FTSE 100 falling and U.S. futures indicating further losses. Even the cryptocurrency market reacted, with Bitcoin initially tumbling 8% before recovering slightly after Beijing held off on an immediate counter-measure.
The trigger for Trump’s tariff threat was China’s recent move to restrict exports of several rare-earth minerals, which are vital for many U.S. high-tech industries. Trump labeled this action “very hostile,” while Beijing defended it as a legitimate control measure, not an outright ban, assuring that applications for civil use would be approved.
As markets braced for further turmoil, U.S. officials appeared to soften their tone slightly. JD Vance urged Beijing to “choose the path of reason,” suggesting the U.S. response would be contingent on China’s actions. Trump also posted a message aimed at calming nerves, but analysts remain divided on whether this is a genuine attempt at de-escalation or a high-risk negotiation tactic designed to extract concessions.