China has issued a stern warning to countries considering trade deals that may undermine its interests, particularly those influenced by the United States. Beijing’s Ministry of Commerce pledged firm retaliatory actions against any nations aligning with Washington to the detriment of China. The government condemned US trade tactics, labeling them as “unilateral bullying,” and rejected the exclusion of China from international negotiations. Beijing emphasized that fair trade should be based on mutual respect and equality, vowing to take “resolute and reciprocal” measures to defend its national interests.

China’s strong stance comes amid growing tensions between the two global superpowers. The US, under the Trump administration, has ramped up efforts to isolate China by pressuring its trade partners into sidelining Beijing. The Chinese Ministry of Commerce argued that these aggressive trade measures violate global norms, potentially pushing global trade into a state of lawlessness. They also warned that such practices would not only harm China but have ripple effects, damaging economies worldwide.

Xi Strengthens Regional Alliances Amid Growing US Pressure

In response to the increasing trade pressure from the US, President Xi Jinping visited Vietnam, Malaysia, and Cambodia last week in a bid to reinforce China’s economic ties with Southeast Asia. Official Chinese sources described the trip as an important step towards enhancing regional stability and integration, with Xi calling for greater collaboration in the face of rising global protectionism. During his visit, China emphasized its commitment to fostering mutually beneficial partnerships and countering isolationist policies pushed by Washington.

Meanwhile, the US has suggested secondary tariffs on countries that maintain close economic ties with China, further escalating the trade tensions between the two powers. While China strengthens its regional alliances, the US is tightening its grip on global trade, seeking to expand its influence through various economic pressures.

Escalating Tariffs and Non-Tariff Measures Affect Global Markets

The trade conflict between the US and China has taken a new turn, with both sides significantly increasing tariffs. The US has imposed a staggering 145% tariff on Chinese goods, while China has retaliated with a 125% tariff on American products. However, both nations have paused the implementation of additional tariffs for now, opting instead to escalate tensions through non-tariff measures.

In a move that has drawn international attention, China has restricted exports of crucial minerals, such as rare earth elements, which are vital to global production chains. This move specifically targets US supply lines, exacerbating the already tense situation. In response, President Trump ordered a national security investigation into mineral imports, emphasizing the importance of rare earth minerals to the US economy and defense industries. The US also imposed new docking fees on Chinese ships entering US ports, with the Office of the US Trade Representative revealing that the decision followed a year-long investigation into China’s trade practices.

Market Volatility and Safe-Haven Assets Soar

As trade tensions continue to escalate, global financial markets have shown signs of significant volatility. On Easter Monday, Asian markets experienced sharp declines, while investors flocked to safe-haven assets in response to growing uncertainty. Gold futures saw a dramatic surge, rising 1.8% to reach an all-time high of $3,389 per ounce. Spot gold also saw record highs, climbing to $3,376 per ounce.

Meanwhile, the euro strengthened, rising above 1.50 against the US dollar for the first time since late 2021. Both the Japanese yen and the Swiss franc also gained in value as investors sought safer alternatives amid the heightened risks associated with the trade war. In the US, stock futures continued to fall, and the dollar weakened as markets reacted to the prolonged trade conflict. Analysts are warning that if these trade disputes remain unresolved, they could trigger broader economic disruptions, affecting global supply chains and economic growth.

A Stalemate on the Horizon

Despite the mounting economic pressures, both China and the US remain entrenched in their positions, with no clear resolution in sight. China has indicated that it will not back down from its stance, insisting on fair and equal treatment in global trade. On the other hand, the US continues to apply pressure through tariffs and other measures, hoping to force China to make concessions.

As the trade war persists, the global economy remains on edge, with many nations caught in the crossfire. The situation is particularly concerning for emerging markets and economies dependent on global trade stability. In the coming weeks, it will be critical to watch how China and the US navigate this ongoing conflict, as further escalation could have far-reaching consequences.