China Vows to ‘Fight to the End’ as Trump Escalates Global Trade War

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.

“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 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 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 climbed 1%, clawing back some of the more than 7% slide on Monday. Hong Kong’s Hang Seng Index .HIS 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.PAsaid 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.

Source: Reuters