China refused to bow to what it called “blackmail” after Trump threatened to ratchet up tariffs on U.S. imports from the world’s No. 2 economy to more than 100% in response to China’s decision to match “reciprocal” duties Trump announced last week.
U.S. Treasury Secretary Scott Bessent blasted Beijing in an interview with CNBC. He stressed that any U.S. negotiations with other countries on tariffs were the result of them knocking on Washington's door and not due to global market turmoil.
China on Tuesday vowed to “fight to the end”.
European Commission President Ursula von der Leyen in a phone call with China's Premier Li Qiang called on Beijing to ensure a negotiated solution and stressed the need to support a fair trading system founded on a level playing field.
Chinese manufacturers of goods from tableware to flooring are warning about profits, and scrambling to plan new overseas plants as they reel from the tariff news. Citing rising external risks, Citi cut its 2025 China GDP growth forecast to 4.2% from 4.7%.
While defending Trump’s tariffs, Vance criticised the U.S. economic model as harming its own workers: “We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture.”
As financial market sentiment remained fragile, the head of the pan-European stock exchange operator Euronext said the United States was starting to resemble an emerging market.
“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.”
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.
U.S. stock index futures edged higher after suffering trillions of dollars in losses since last week.
EUROPE EYES COUNTER-MEASURES
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 impose tariffs on EU alcoholic drinks.
Facing some of the steepest U.S. duties, low-cost manufacturing hub Vietnam has requested a 45-day delay while Indonesia announced concessions for U.S. imports including reducing taxes on electronic goods and steel.
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