In a sharp escalation of trade tensions, China has vowed to “fight to the end” following U.S. accusations that Beijing is intentionally undermining the global economy. The U.S. Treasury Secretary, Scott Bessent, claimed that China’s recent actions, including restrictions on rare earth exports, are designed to “pull everybody else down” and destabilize global markets.
In retaliation, China has imposed export controls on rare earth minerals, vital for various industries worldwide, citing national security concerns. Additionally, both countries have enacted new tariffs and port fees: the U.S. has introduced duties on Chinese-linked ships, while China has responded with similar measures, further straining trade relations.
Despite these heightened tensions, the International Monetary Fund (IMF) reports that the global economy has shown unexpected resilience. The IMF has slightly upgraded its 2025 global GDP growth forecast to 3.2%, though it cautions that the full effects of protectionist policies have yet to materialize. The IMF also warns of potential downturn risks linked to overvalued investments in sectors driven by generative AI and rising inflation in various regions.
As both nations prepare for a potential meeting between President Trump and Chinese President Xi Jinping at the upcoming APEC summit, the international community watches closely, hoping for a resolution to the escalating trade dispute.
