BEIJING/WASHINGTON/PARIS, April 8 (Reuters) – China refused to bow to what it called “blackmail” from the United States as a global trade war ignited by President Donald Trump’s sweeping tariffs showed little sign of abating on Tuesday, even as battered stock markets steadied.
Beijing’s rebuke came after Trump threatened to ratchet up tariffs on U.S. imports from the world’s No. 2 economy to more than 100% on Wednesday in response to China’s decision to match the “reciprocal” duties Trump announced last week.
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“The U.S. side’s threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American side’s blackmailing nature,” China’s commerce ministry said.
“If the U.S. insists on having its way, China will fight to the end.”
Chinese manufacturers of goods from tableware to flooring are warning about profits, scrambling to plan new overseas plants and haggling with customers over prices as they reel from the tariff news.
The European Union has proposed counter-tariffs of its own to Trump’s onslaught that has swept up dozens of countries, sent financial markets into a tailspin and fuelled expectations that the global economy may be headed for recession.
Stock markets found a firmer footing on Tuesday after a gut-wrenching few days for investors which prompted some business leaders, including those close to Trump, to urge the president to reverse course.
European shares (.STOXX)
, opens new tab bounced off 14-month lows in early trading after four straight sessions of heavy selling, while global oil prices rebounded following a hefty sell-off.
Japan’s Nikkei index (.N225)
, opens new tab closed 6% higher on Tuesday, rebounding from a 1-1/2-year low hit in the previous session, after Trump and Japanese Prime Minister Shigeru Ishiba agreed to open trade talks.
Chinese blue chips (.CSI000300)
, opens new tab climbed 1%, clawing back some of the more than 7% slide on Monday. Hong Kong’s Hang Seng Index (.HIS)
, opens new tab rose after suffering the worst day since 1997 due to what the trading hub’s leader called “ruthless” tariffs.
Indonesian markets were slammed, however, with stocks shedding 9% and the rupiah currency slumping to a record low as trading resumed after an extended holiday. Its central bank pledged to intervene, joining efforts by other global authorities to stem the rout in recent days.
As financial markets remained volatile, the head of the pan-European stock exchange operator Euronext (ENX.PA)
, opens new tab said the United States was starting to resemble an emerging market.
“Fear exists all over,” Stephane Boujnah told France Inter radio, saying the U.S. had become “unrecognisable”.
“There is a certain form of mourning, because the United States that we had known for the most part as a dominant nation resembled the values and institutions of Europe and now resembles more an emerging market.”
Emerging markets often use targeted tariffs to protect certain industries from foreign competition.
Trump said the tariffs – a minimum of 10% for all U.S. imports, with targeted rates of up to 50% – would help the United States recapture an industrial base that he says has withered over decades of trade liberalisation.
“It’s the only chance our country will have to reset the table. Because no other president would be willing to do what I’m doing, or to even go through it,” he told reporters at the White House.
A table showing sectors of imported products and the corresponding estimated price increases that could result from Trump’s sweeping tariffs, ranging from 10% for medical diagnostic equipment to 30% for computer parts and toys & video games.
EUROPE EYES COUNTER-MEASURES
The European Commission, meanwhile, proposed counter-tariffs of 25% on a range of U.S. goods including soybeans, nuts and sausages, though other potential items like bourbon whiskey were left off the list, according to a document seen by Reuters.
Officials said they stood ready to negotiate a “zero for zero” deal with Trump’s administration.
The 27-member bloc is struggling with tariffs on autos and metals already in place, and faces a 20% tariff on other products on Wednesday. Trump has also threatened to slap tariffs on EU alcoholic drinks.
Facing some of the steepest duties set to be imposed globally, low-cost manufacturing hub Vietnam has requested a 45-day delay and said it will buy more American goods, including defence and security products, to rebalance trade.
tariff on low income and lower-middle income countries
Investors and political leaders have struggled to determine whether Trump’s tariffs are permanent or a pressure tactic to win concessions from other countries.
U.S. Treasury Secretary Scott Bessent met with Trump in Florida on Sunday, Politico reported, to urge him to emphasize striking trade deals with partners in order to reassure the markets that there is an endgame to the U.S. strategy.
Administration officials say dozens of other countries have reached out with the hope of heading off the tariffs due to take effect on Wednesday.
Wall Street leaders such as JPMorgan Chase (JPM.N)
, opens new tab CEO Jamie Dimon said the tariffs could have lasting negative consequences, while Trump supporter and fund manager Bill Ackman said they could lead to an “economic nuclear winter.”
Elon Musk, the world’s richest man and head of Trump’s effort to slash government spending, has called for zero tariffs between the U.S. and Europe, and the Washington Post reported that he has appealed directly to Trump to reverse the tariffs.
On Monday, Trump trade adviser Peter Navarro dismissed the Tesla CEO as a “car assembler.”
This map shows the percentage of reciprocal tariffs imposed by the U.S. administration on each economy.
Reporting by Reuters newsrooms; Writing by John Geddie and Matthias Williams; Editing by Lincoln Feast and Hugh Lawson
Our Standards: The Thomson Reuters Trust Principles.
Joe Cash reports on China’s economic affairs, covering domestic fiscal and monetary policy, key economic indicators, trade relations, and China’s growing engagement with developing countries. Before joining Reuters, he worked on UK and EU trade policy across the Asia-Pacific region. Joe studied Chinese at the University of Oxford and is a Mandarin speaker.
