Beijing vows a 'fight to the end' on tariffs

China pledged to retaliate against Donald Trump's latest tariff threat and stepped up efforts to support its market, raising the risk of a prolonged trade war between the world's two largest economies.

- 

"The US threat to escalate tariffs on China is a mistake on top of a mistake," the Chinese Ministry of Commerce said in a statement yesterday. "If the US insists on its own way, China will fight to the end."

China's response came hours after Trump vowed to slap an additional 50% import tax on Beijing unless it withdraws its tit-for-tat retaliation against his earlier levies. The blunt reaction suggests China intends to resist the Trump's pressure campaign, dimming the prospect of a deal in the short term.

"The rhetoric from China is strong," said Michelle Lam, greater China economist at Societe Generale SA. "Without Trump backing down investors may need to prepare for trade decoupling between both countries."

Chinese authorities have signalled their determination to support markets. The central bank has loosened its grip on yuan by abandoning a reversal of its exports and a group of state-linked funds known as the national team scooped up assets. Officials also promised loans to help stabilise the market and were reported to have considered frontloading some stimulus.