- China vows full-scale retaliation as U.S. tariffs escalate trade war tensions.
- Crypto markets swing as investors react to the U.S.-China economic conflict.
China has vowed to retaliate against U.S. tariffs, escalating tensions between the world’s two largest economies. China has taken a firm position after President Donald Trump implemented new trade taxes against China and Canada, along with Mexico and other nations.
The disagreement about trade imbalances and fentanyl issues endangers global commerce systems while creating financial instability. Investors’ volatile market responses have caused Bitcoin and other cryptocurrencies to become more unstable because of rising fears about trade fluctuations.
China Responds to U.S. Tariffs with Economic Retaliation
Beijing has openly challenged the U.S. over its latest tariff policies, signaling its readiness for an extended economic confrontation. In a statement posted on X, the Chinese Embassy in Washington declared, “If war is what the U.S. wants, be it a tariff war, a trade war, or any other type of war, we are ready to fight till the end.” The Chinese Foreign Ministry accused the U.S. of using the fentanyl crisis as a pretext to impose trade barriers, calling the move an act of coercion and blackmail.
If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end. https://t.co/crPhO02fFE
— Chinese Embassy in US (@ChineseEmbinUS) March 5, 2025
China’s Ministry of Finance declared new countermeasures through March 10 by raising the tariffs on essential American exports such as chicken and wheat as well as corn and cotton products to at most 15 percent. Beijing established new export restrictions by placing 15 U.S. companies on its control list, which cut off their Chinese material supply. China initiated two trade actions at this time by starting an anti-dumping investigation of U.S. fiber optic products and blocking lumber imports from the United States.
Trump’s Tariff Strategy Sparks Global Trade Tensions
The latest trade policies by Trump involving tariffs that exceed 25% for Canada and Mexico as well as 20% for China imports have resulted in quick responses from affected countries. The United States has been retaliated against by both Canada and China after making its move as Mexico moves forward with its countermeasures. The Trump administration states that trade tariffs are crucial for stopping illegal drug traffic and addressing trade deficiencies. Many experts believe the newly implemented tariffs will simultaneously increase prices and deteriorate international relationships.
During his address to Congress, Trump stated that other nations impose significantly higher tariffs on American goods, calling the system unfair. “On April 2, reciprocal tariffs kick in. Whatever they tax us, we will tax them,” he said. Canadian Prime Minister Justin Trudeau condemned the move, warning of long-term economic damage. “We will not back down from a fight,” Trudeau said, announcing tariffs on $107 billion worth of U.S. goods, with additional measures coming in three weeks.
Mexico’s President Claudia Sheinbaum also criticized the decision, stating that U.S. tariffs harm both nations’ economies. She announced retaliatory tariffs set to be revealed Sunday and hinted at non-tariff measures to counteract Trump’s policies.
Crypto Markets React as Economic Uncertainty Grows
The intensifying trade dispute has sparked volatility across financial markets, including cryptocurrencies. Bitcoin’s price climbed 7.7% after Commerce Secretary Howard Lutnick suggested that Trump might reconsider the harshest measures against Canada and Mexico. Earlier in the week, Bitcoin had surged on speculation that Trump would create a strategic crypto reserve but dipped sharply when the tariffs took effect.
Financial analysts suggest that ongoing trade uncertainty could further drive crypto price swings as investors seek alternative assets during economic turbulence. Given the close correlation between Bitcoin and risk-on assets like equities, any developments in the U.S.-China trade war could heavily impact digital currencies in the coming weeks.
As tensions escalate, all eyes are on April 2, when the full scope of reciprocal tariffs takes effect. With China and other trading partners preparing countermeasures, the global economy faces heightened risks—while cryptocurrency markets brace for further volatility.
