By JOE CASH AND STEVE HOLLAND
BEIJING/WASHINGTON – China vowed not to bow to “blackmail” from the United States as a global trade war ignited by US President Donald Trump’s sweeping tariffs showed little sign of abating on Tuesday even as battered stock markets steadied.
The rebuke came after Trump said he would impose an additional 50 percent duty on US imports from the world’s No.2 economy on Wednesday in response to Beijing’s decision to match the 34 percent ‘reciprocal’ duties Trump initially unveiled last week.
“The US 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 US insists on having its way, China will fight to the end.”
The European Union proposed counter-tariffs of its own to Trump’s tariff onslaught that 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 appeared to find a firmer footing 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.
Japan’s Nikkei index rose 6 percent on Tuesday, rebounding from a 1-1/2-year low hit in the previous session, after Trump and Japan Prime Minister Shigeru Ishiba agreed to open trade talks in a phone call late Monday.
Chinese blue-chips climbed 0.7 percent, recouping a fraction of the more than 7 percent slide on Monday. Hong Kong’s Hang Seng jumped 2 percent after suffering the worst day since 1997 as a result of what the trading hub’s leader called “ruthless” tariffs.
US stock futures also pointed higher after slumping to the lowest level in more than a year.
Indonesian markets were slammed, however, with stocks shedding 9 percent and the rupiah currency ploughing a record low as trading resumed on Tuesday after an extended holiday.
Trump said the tariffs – a minimum of 10 percent for all US imports, with targeted rates of up to 50 percent – would help the United States recapture an industrial base that he says has withered over decades of trade liberalization.
“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.
The European Commission, meanwhile, proposed counter-tariffs of 25 percent on a range of US 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. “Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise,” EU Trade Commissioner Maros Sefcovic said at a news conference.
The 27-member bloc is struggling with tariffs on autos and metals already in place, and faces a 20 percent tariff on other products on Wednesday. Trump has also threatened to slap tariffs on EU alcoholic drinks. – Reuters
