Zürcher Nachrichten - China ready to 'fight' US trade war, EU seeks to cool tensions

Trump has upended the world economy with sweeping tariffs that have raised the spectre of an international recession, but has ruled out any pause in his aggressive trade policy despite a dramatic market sell-off.

Beijing -- Washington's major economic rival but also a key trading partner -- responded by announcing its own 34 percent duties on US goods to come into effect on Thursday, deepening a showdown between the world's two largest economies.

The swift retaliation from China sparked a fresh warning from Trump that he would impose additional levies of 50 percent if Beijing refused to stop pushing back against his barrage of tariffs -- a move that would drive the overall levies on Chinese goods to 104 percent.

"I have great respect for China but they can not do this," Trump said at the White House.

"We are going to have one shot at this... I'll tell you what, it is an honour to do it."

China swiftly hit back, blasting what it called "blackmailing" by the United States and vowing "countermeasures" if Washington imposes tariffs on top of the 34 percent extra that were due to come in force on Wednesday.

"If the US insists on going its own way, China will fight it to the end," a spokesperson for Beijing's commerce ministry said on Tuesday.

- 'Ignorant, impolite' -

In a mounting war of words between Beijing and Washington, China's foreign ministry also condemned "ignorant and impolite" remarks by US Vice President JD Vance in which he complained the US had for too long borrowed money from "Chinese peasants".

The ministry said that "pressure, threats and blackmail are not the right way to deal with China".

Beijing urged Washington to instead "adopt an attitude of equality, respect and mutual benefit" if it wanted to engage in talks.

The European Union sought to cool tensions, with the bloc's chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese Premier Li Qiang.

She stressed the "vital importance of stability" for the world's economy, urged a "negotiated solution" and emphasised "the need to avoid further escalation," according to a readout of the call from EU officials.

The EU is weighing its own response to the 20-percent tariffs it is facing, with its biggest economies Germany and France advocating a tax targeting US tech giants.

But Brussels has also proposed an exemption from tariffs on industrial products, including cars, which Trump said Monday was not enough to account for the US trade deficit with the EU.

"The European Union has been very, very bad to us," Trump said.

A 10 percent "baseline" tariff on US imports from around the world took effect Saturday, and a slew of countries will be hit by higher duties from Wednesday, including China and the EU.

Trump's tariffs have roiled global markets in the last days, with trillions of dollars wiped off combined stock market valuations in recent sessions.

Stock markets staged a mild rebound on Tuesday, with Hong Kong's Hang Seng index rising 1.5 percent after crashing 13.2 percent the previous day in its worst performance since 1997.

Shares in Tokyo leapt after Treasury Secretary Scott Bessent suggested in a Fox News interview that Japan would get "priority" in negotiations over the US tariffs "just because they came forward very quickly".

Scores of countries have sought talks, Bessent said, adding "through good negotiations, all we will do is see levels come down".

European markets also clawed back some ground, with London, Paris and Frankfurt all up more than one percent in morning trade.

Trump believes the tariffs will revive America's lost manufacturing base by forcing foreign companies to relocate to the United States, rather than making goods abroad.

But most economists question that and say his tariffs are arbitrary.

Despite the turmoil, Trump said Monday he was "not looking" at any pause in tariff implementation.

He also scrapped any meetings with China over tariffs, but said Washington was ready for talks with any country willing to negotiate.

While meeting Israel's Prime Minister Benjamin Netanyahu, the first leader to lobby Trump in person over the levies, Trump said: "There can be permanent tariffs, and there can also be negotiations, because there are things that we need beyond tariffs."

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J.Hasler--NZN