Afp Business Asia

China is trying to tariff-proof its economy by boosting consumption and investing in key industries, but analysts say it remains critically vulnerable to the economic storm triggered by Donald Trump’s 104 percent levies on its goods.Beijing has vowed to “fight to the end” against Trump’s aggressive trade policy, with number two leader Li Qiang saying authorities were “fully confident” in the resilience of the Chinese economy.But even before the tariffs hit, weakness in the post-Covid domestic market, rising unemployment and a long-running property crisis had all dampened consumption.”The Chinese economy has been significantly weakened since Trump’s first term and can’t really withstand the impact of sustained high tariffs,” said Henry Gao, an expert on the Chinese economy and international trade law.Overseas shipments had represented a rare bright spot last year, with the United States the top single country buyer of Chinese goods. US figures put Chinese exports to the United States at around $440 billion in 2024, almost three times the $145 billion worth of imports. Machinery and electronics — as well as textiles, footwear, furniture and toys — make up a majority of the goods sent, and a supply glut could squeeze already crowded domestic consumer markets.Although China’s domestic market is stronger now than in Trump’s previous term, there would inevitably be pain ahead, said Tang Yao from Peking University’s Guanghua School of Management. “Certain products are specifically designed for American or European markets, so efforts to redirect them to domestic consumers will have only a limited effect,” he said.- ‘Strategic opportunity’ -However, a weekend editorial in the Communist Party-backed People’s Daily described the tariffs as a “strategic opportunity” for China to cement consumption as the main driver of economic growth.We must “turn pressure into motivation”, it read. Beijing has been seeking to “recast structural external pressure as a catalyst for long-intended reforms”, said Lizzi Lee from the Asia Society Policy Institute’s Center for China Analysis.Authorities are “projecting confidence”, she said.China’s quick and coordinated response to tariffs reflect lessons learned from Trump’s first term, she added.For example, in addition to readying reciprocal tariffs on US goods set to come into effect Thursday, Beijing’s commerce ministry the same day announced export controls on seven rare earth elements — including ones used in magnetic imaging and consumer electronics.Beijing’s response to any further escalation may no longer be confined to tit-for-tat levies, as China is “refining its retaliatory approach”, Lee said.Since Trump’s first term, China has diversified and fortified relationships with countries in Europe, Africa, Southeast Asia and Latin America, as well as South Korea and Japan. Beijing could also expand government support for the private sector as entrepreneurs fall back into President Xi Jinping’s good graces, added ANZ’s Raymond Yeung.China’s leaders have been trying to promote domestic self-reliance in technology for some time, offering explicit support and reinforcing supply chains in key areas like AI and chips. – ‘No real protection’ -While this time round Beijing has more experience with Trump, it “doesn’t mean the Chinese economy can easily shake off the effects of soaring tariffs”, said Frederic Neumann, chief Asia economist at HSBC.Authorities will be looking to quickly offset falling US demand for Chinese goods, he said.That could look like trade-in schemes or more consumer subsidies that make it easier for Chinese shoppers to buy common household items, from water purifiers to electric vehicles.”By creating demand and trade opportunities for China’s partners in Asia and Europe, the country could help shore up what’s left of the liberal global trading order,” Neumann said.But whether or not Beijing can do that is yet to be seen.The government has “been very reluctant to introduce real consumption stimulus, which is why there’s such low confidence in any so-called consumption-boosting measures”, Gao said. “I don’t think China has any real protection against a trade war,” he added.Success also goes beyond words, and ultimately hinges on Beijing’s ability to deliver the long-awaited consumption boost, HSBC’s Neumann warned.”This is China’s moment to seize economic leadership of the world,” he said. “But that leadership will only come about if domestic demand rebounds and fills the void left by an absent US.” 

US President Donald Trump’s punishing tariffs on dozens of economies came into force Wednesday, including over 100 percent on China, as Beijing vowed “forceful” action in an intensifying trade war that sparked fresh panic on the markets.Following the sweeping 10 percent tariffs that took effect over the weekend, rates on imports to the United States from exporters like the European Union or Japan rose further at 12.01 am (0401 GMT) Wednesday.China — Washington’s top economic rival but also a major trading partner — is the hardest hit, with tariffs imposed on its products since Trump returned to the White House now reaching a staggering 104 percent.In response, Beijing’s foreign ministry promised to take “firm and forceful” steps to protect its interests, while its commerce ministry said the country had “abundant means” to fight a trade war.Trump has said his government was working on “tailored deals” with trading partners, with the White House saying it would prioritize allies like Japan and South Korea.His top trade official Jamieson Greer also told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs.Trump told a dinner with fellow Republicans on Tuesday night that countries were “dying” to make a deal.”I’m telling you, these countries are calling us up kissing my ass,” he said.But Beijing has shown no signs of standing down, vowing to fight a trade war “to the end” and promising countermeasures to defend its interests.A government white paper released Wednesday, however, stressed the two countries could still resolve their differences “through equal-footed dialogue and mutually beneficial cooperation”.China’s retaliatory tariffs of 34 percent on US goods are due to enter in force at 12:01 am local time on Thursday (1601 GMT Wednesday).Residents in Beijing expressed fears over the escalating trade war, with lawyer Yu Yan urging dialogue.”I hope that everyone can sit down and reconcile and talk, and then put things out step by step, rather than irrationally escalate them,” she told AFP.In the United States, consumers also voiced worries over rising prices.At a supermarket in New York, Anastasia Nevin told AFP she is currently in “survival mode.””I have two kids so I’m just trying to get by. It’s tough,” she said Tuesday, adding she would likely need to cut back on spending if prices rise further. – China ‘wants to make a deal’ -The US president believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States.But many business experts and economists question how quickly — if ever — this can take place, warning of higher inflation as the tariffs raise prices.Trump said Tuesday the United States was “taking in almost $2 billion a day” from tariffs.Trump originally unveiled a 34 percent additional tariff on Chinese goods. But after China countered with its own tariff of the same amount on American products, Trump piled on another 50 percent duty.Taking into account existing levies imposed in February and March, that brings the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104 percent.Trump has insisted the ball was in China’s court, saying Beijing “wants to make a deal, badly, but they don’t know how to get it started.”Late Tuesday, Trump also said the United States would announce a major tariff on pharmaceuticals “very shortly”.Separately, Canada said that its tariffs on certain US auto imports will come into force Wednesday.- Meltdown -After trillions in equity value were wiped off global bourses in the last days, markets in Asia came under pressure again on Wednesday, with Hong Kong plunging more than three percent before paring some losses at close.Japan’s Nikkei closed down 3.9 percent and Taiwan stocks shed 5.8 percent, while European markets sank at open.Foreign exchange markets likewise witnessed ructions, with the South Korean won falling to its lowest level against the dollar since 2009 this week.China’s offshore yuan also fell to an all-time low against the US dollar, as Beijing’s central bank moved to weaken the yuan on Wednesday for what Bloomberg said was the fifth day in a row.Analyst Stephen Innes said however, that “letting the yuan grind lower at this measured pace won’t offset the blow from a full-blown tariff barrage”. “The levies are simply too big. China is trying to thread the needle, but the runway is short,” he warned.Oil prices slumped, with the West Texas Intermediate closing below $60 for the first time since April 2021.- Avoid ‘further escalation’ -The European Union has 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 stability for the world’s economy, alongside “the need to avoid further escalation,” said an EU readout.The Chinese premier told von der Leyen that his country could weather the storm, saying it “is fully confident of maintaining sustained and healthy economic development.”The EU — which Trump has criticized bitterly over its tariff regime — may unveil its response next week to new 20 percent levies it faces.In retaliation against US steel and aluminum levies that took effect last month, the EU plans tariffs of up to 25 percent on American goods ranging from soybeans to motorcycles, according to a document seen by AFP.burs-oho/hmn

Equities tumbled on Wednesday after US President Donald Trump ramped up his trade war by hitting China with tariffs of more than 100 percent and sweeping measures against dozens of trading partners came into effect.After a brief respite on Tuesday, investors were once again panicking amid fears the Trump’s blow to commerce will spark a global recession.India and New Zealand’s central banks cut interest rates to shore up their economies, while speculation that Beijing will unveil stimulus measures helped Shanghai and Hong Kong stocks buck the downward trend.China and the United States were headed for a vicious standoff after Trump threatened fresh tariffs of 50 percent in response to Beijing’s retaliation in kind to his initial 34 percent duty announced last week.With China already subject to a 20 percent toll, its exporters are now facing tariffs of up to 104 percent.Beijing has blasted what it called US blackmail and vowed to “fight it to the end”, fanning worries the crisis could spiral out of control.After the levies kicked in on Wednesday, Beijing’s commerce ministry warned that China had “firm will and abundant means” to fight a trade war, state news agency Xinhua said.Forex markets were rattled — Beijing has allowed the yuan to weaken to a record low against the dollar, while the Indonesian rupiah was also at an all-time nadir. The South Korean won also hit its weakest since 2009 during the global financial crisis.Meanwhile, the European Union could unveil its response to the tariffs next week. French President Emmanuel Macron has called for Washington to reconsider but said that if the bloc was forced to retaliate, “so be it”.In response to steel and aluminium levies that took effect last month, Brussels is planning measures of up to 25 percent on US goods ranging from soybeans to motorcycles, according to a document seen by AFP.Chinese Premier Li Qiang told EU chief Ursula von der Leyen that Beijing had the “tools” to handle headwinds, according to state news agency Xinhua.South Korea unveiled a $2 billion emergency support for its crucial export-focused carmakers, warning Trump’s 25 percent tariffs on the sector could deal a terrible blow. And the Association of Southeast Asian Nations (ASEAN) said it must “act boldly” to accelerate regional integration.Members of the bloc — which counts the United States as their main export market — were among those slapped with the toughest levies.- 50% chance of recession -“Any illusion of calm in Asia just got nuked. Trump’s latest tariff tantrum hits like a macro wrecking ball, torching what was left of risk appetite and plunging markets back into full-blown panic mode,” said Stephen Innes at SPI Asset Management.”The only question on every desk this morning is: Is he really willing to light a global recession match just to redraw the trade map?”Trump believes his policy will revive the country’s lost manufacturing base by forcing companies to relocate to the United States, saying on Tuesday that countries were “dying to make a deal”.Earlier he said the country was “taking in almost $2 billion a day” from tariffs but the measures have sent shockwaves through markets and wiped trillions of dollars off company valuations.Jack Ablin of Cresset Capital estimated that the market now sees a greater than 50 percent chance of a US recession.The gains in Asia and Europe on Tuesday came on optimism that the White House could be open to compromise.But a lack of movement and Trump’s confirmation of the 50 percent duties on China took the air out of investor sentiment.That saw Wall Street reverse healthy opening gains to end deep in the red — the S&P 500 finished below 5,000 points for the first time in almost a year.Asia and Europe resumed their retreat Wednesday but pared early big losses.Tokyo fell four percent as the safe-haven yen rose more than one percent, while Taipei cratered almost six percent. Singapore, Sydney and Seoul dropped more than one percent, while Wellington, Mumbai and Jakarta also faced losses.London, Paris and Frankfurt tumbled, with pharmaceutical firms taking a heavy hit after Trump said he would be announcing a major levy on the sector. Weight-loss drug maker Novo Nordisk dived more than seven percent and AstraZeneca shed six percent.Shanghai rose amid speculation that state-backed funds were propping the market up and the government would unveil fresh stimulus, while Hong Kong also rallied thanks to an afternoon bounce.Oil prices lost more than two percent, with both main contracts sitting around four-year lows amid growing fears that the hit to economies will batter demand.- Key figures around 0810 GMT -Tokyo – Nikkei 225: DOWN 3.9 percent at 31,714.03 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 20,264.49 (close)Shanghai – Composite: UP 1.3 percent at 3,186.81 (close)London – FTSE 100: DOWN 1.6 percent at 7,785.58 Dollar/yen: DOWN at 144.70 yen from 146.23 yen on TuesdayEuro/dollar: UP at $1.1085 from $1.0959 Pound/dollar: UP at $1.2860 from $1.2766Euro/pound: UP at 86.20 pence from 85.78 penceWest Texas Intermediate: DOWN 2.3 percent at $58.23 per barrelBrent North Sea Crude: DOWN 2.2 percent at $61.42 per barrelNew York – Dow: DOWN 0.8 percent at 37,645.59 (close)

The leaders of Spain and Vietnam pledged on Wednesday to upgrade ties to the highest level, as the two countries attempt to manage the fallout from enormous tariffs imposed by Washington.During a visit by Spanish Prime Minister Pedro Sanchez to Hanoi, he and counterpart Pham Minh Chinh signed a joint declaration aiming to elevate ties to the level of comprehensive strategic partnership.It came on the same day US President Donald Trump’s 20 percent tariffs on EU products, and a massive 46 percent levy on Vietnamese goods, came into force. Sanchez said Spain was committed to an international order based on rules, “free trade and economic freedom”.”Trade wars benefit no one, but harm everyone,” he said.”In a global context as complex as the one we are in, the Spanish government is firmly committed to the opening up of our country and Europe to Southeast Asia,” he added.Chinh said Vietnam had proposed Spain be “a bridge to promote our relationship with the EU and Latin American countries (and), for its part, Vietnam agrees to be a bridge to strengthen the relationship between Spain and ASEAN (the Association of Southeast Asian nations)”.The pair signed five memoranda of understanding including on financial cooperation, culture cooperation and agricultural safety.On Wednesday, Sanchez also met Vietnam’s top leader, To Lam.He will travel to Ho Chi Minh City, the Asian manufacturing powerhouse’s commercial capital, to speak to business leaders on Thursday.The Socialist prime minister then heads to China for his third visit in just over two years, where he is scheduled to meet President Xi Jinping and Chinese investors on Friday.Sanchez broke with the rest of the European Union on his last trip to China in September 2024, urging the bloc to reconsider plans to impose high tariffs on Chinese electric cars and calling for a “fair trade order”.China and Vietnam currently sell much more to Spain than they buy.

India’s central bank cut interest rates in the world’s fifth-largest economy on Wednesday as US President Donald Trump’s tariffs kicked in and policymakers warned of “challenging global economic conditions”.The cut, the second this year, aims to boost a slowing economy grappling with the impact Trump’s sweeping tariffs.The Reserve Bank of India (RBI) said the benchmark repo rate, the level at which it lends to commercial banks, would be reduced by 25 basis points to 6 percent.The central bank’s decision was announced the same day Trump’s 26 percent tariff for the world’s most populous nation came into effect.Easing inflation concerns over the last few months have allowed the RBI to focus on perking up the Indian economy, whose growth has slowed in the last few quarters.Trump’s protectionist trade policies will likely add to growth pressures and present a challenge for Indian policymakers.While New Delhi is not a manufacturing powerhouse, experts believe that high US tariffs will hurt billions of dollars of Indian exports across different sectors, including gems, jewellery and seafood.- ‘Uncertainties’ -Economists project that Trump’s tariffs drive will impact India’s GDP growth, with analysts at Goldman Sachs reducing their forecast for the current fiscal year from 6.3 to 6.1 percent.The RBI was more cautious on Wednesday, downgrading its GDP growth projection for the current financial year from 6.7 percent to 6.5 percent. The central bank’s monetary policy committee (MPC) said that “recent trade tariff related measures” had “exacerbated uncertainties” and clouded the “economic outlook across regions”.”In such challenging global economic conditions, the benign inflation and moderate growth outlook demands that the MPC continues to support growth,” it added in a statement.RBI governor Sanjay Malhotra, speaking in the financial capital Mumbai, said the “dent on global growth due to trade frictions will impede domestic growth”.”The year has begun on an anxious note for the global economy,” he said. “Some of the concerns on trade frictions are coming true, unsettling the global community.”Malhotra added that “several known unknowns”, including the impact of relative tariffs, made the “quantification of the adverse impact difficult”.- ‘Headwinds’ -India’s central bank cut interest rates for the first time in nearly five years in February 2024, as it sought to boost an economy that has been weighed down by muted urban consumer sentiment, a sluggish manufacturing sector and lower government expenditure.The Indian economy is projected to grow at its slowest pace since the Covid-19 pandemic and down from 9.2 percent in 2023-24.New Delhi has responded cautiously to Trump’s chaotic trade policies so far.The Department of Commerce said last week it was examining both “implications” and “opportunities” after rival manufacturing competitors were harder hit by Trump’s hike in duties.New Delhi and Washington are currently negotiating a bilateral trade agreement, the first tranche of which they hope to finalise by this autumn.Shilan Shah from Capital Economics said that the “RBI decision had come as “no surprise given the recent sharp drop in inflation and the headwinds from US tariffs”.Shah added that further rate cuts would be expected with the “uncertainty around US trade policy set to rumble on and inflation looking contained”.

Taiwanese exporters are crunching numbers and talking to American clients as they scramble to figure out how to respond to US President Donald Trump’s tariff blitz that threatens to derail their businesses.While the final impact is not yet known, factory owners on the island are clear eyed on one thing: moving operations to the United States is easier said than done. “Taiwan’s structure is what makes this industry viable,” the owner of a machine tool exporter told AFP on the condition of anonymity, highlighting the island’s network of small and medium-sized factories supplying his company.”There are so many components, like gears, belts and others — the US doesn’t have these industries. Setting up a factory in the US would not be worth it,” he said, describing Trump’s policy as “ridiculous”.From Wednesday, Taiwanese products shipped to the United States, including electronics, machinery components, auto parts and bicycles, will be hit with a hefty 32 percent levy.It is part of Trump’s far-reaching global tariffs that have rocked world markets and sparked recession fears, as he seeks to reduce the US trade deficit and push companies to shift manufacturing to American soil.  Many in Taiwan were stunned by the size of the duty, after chipmaking titan Taiwan Semiconductor Manufacturing Co’s plan to invest an additional $100 billion in the United States raised hopes the island would be spared. While chips have so far avoided tariffs, analysts have warned the critical sector could be impacted anyway as levies drive up the cost of iPhones, laptops and other technology, and reduce consumer demand. – ‘Unsophisticated understanding’ -Taiwanese companies have spent days calculating the impact on their operations and speaking to US clients about how to absorb the cost of the new tariff.”They’ve been receiving a lot of calls or instructions,” said Kristy Hsu, director of the Taiwan ASEAN Studies Center at Chung-Hua Institution for Economic Research.She told AFP that US customers had requested deliveries be postponed or prices lowered.Companies were also trying to determine if their products contained at least 20 percent “US content”, which could partially shield them from Trump’s levy, she added.During Trump’s first term in office, US tariffs against China prompted many Taiwanese companies operating there to relocate to Southeast Asia to avoid the tax.This time, however, there are fewer places to hide. Trump has slugged imports from Vietnam and Thailand with 46 percent and 36 percent tariffs, respectively, and there was uncertainty about whether duties could be cut or raised even higher. “Right now, the only option for setting up factories overseas is the United States, but the cost of doing so is extremely high,” an official from an electronic industry group told AFP.”This truly isn’t something that can be done easily,” she said, adding “while we were prepared for some disruption, we didn’t expect the US would come down this hard.”Trump’s across-the-board tariffs revealed an “unsophisticated understanding” of how supply chains worked, said Ho Ming-yen, non-resident fellow of the Research Institute for Democracy, Society and Emerging Technology.- Levy ‘impossible to absorb’ -Even if companies shifted their factories to the United States, they would still be hit with tariffs on imported components needed for their products, Ho said.Ho expected most Taiwanese companies would likely take a “wait-and-see” approach and cut costs as they “wait for the calamities to end”. Taiwan President Lai Ching-te said he had no plans for “retaliatory tariffs” against the United States, the island’s most important security partner.The government has pledged US$2.7 billion to help affected industries, but that was a “drop in the ocean” for what was needed, said Jason Hsu, senior fellow at the Hudson Institute think-tank.Hsu estimated tariffs would cost Taiwanese exporters US$15 billion-US$20 billion a year. To secure any relief from Trump, Taiwan needed to come up with deals for the president, said Hsu, a former member of Taiwan’s legislature for the opposition Kuomintang party.”Trump doesn’t care about allies and partnerships, he cares about how much business you can bring to the US,” Hsu said.The machine tool exporter said the United States was a “very important market” for the company, accounting for 30-40 percent of its sales.While the business would survive in the short term, the owner hoped Taiwan could strike a deal with Washignton.”A four to five percent hike we can split (with our clients) and absorb,” he said.”But 32 percent is impossible to absorb. Our profit margin isn’t that high.”

US President Donald Trump on Tuesday forged ahead with tariffs of over 100 percent against Chinese goods after Beijing refused to withdraw its retaliation as the world’s biggest economies go head-to-head in a ruinous trade war that has rocked global markets.Trump’s sweeping 10 percent tariffs have rocked the global economy since coming into force over the weekend, triggering a dramatic market sell-off worldwide and sparking recession fears.Rates on imports to the United States from dozens of economies will rise further at 12.01 am (0401 GMT) Wednesday.China — Washington’s top economic rival but also a major trading partner — will be hardest hit, with tariffs imposed on its products since Trump returned to the White House reaching a staggering 104 percent.Beijing has vowed to fight a trade war “to the end” against Trump, who remained defiant despite major US indexes tumbling again Tuesday.The US president believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States.But many business experts and economists question how quickly — if ever — this can take place, warning of higher inflation as the tariffs raise prices.Trump said Tuesday the United States was “taking in almost $2 billion a day” from tariffs.He originally unveiled a 34 percent additional tariff on Chinese goods. But after China countered with its own 34 percent tariff on American products, he vowed to pile on another 50 percent duty, signing the executive order for the higher fee on Tuesday.Counting existing levies imposed in February and March, that would take the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104 percent.Trump insisted the ball was in China’s court, saying Beijing “wants to make a deal, badly, but they don’t know how to get it started.”Late Tuesday, Trump also said the United States would announce a major tariff on pharmaceuticals “very shortly”.He also signed an order allowing significantly higher duties on low-value Chinese imports to take effect starting early next month.And he told a dinner with fellow Republicans that countries were “dying” to make a deal.”I’m telling you, these countries are calling us up kissing my ass,” he said.Separately, Canada said that its tariffs on certain US auto imports will come into force Wednesday.- China ‘confident’ -After trillions in equity value were wiped off global bourses in the last days, markets in Asia opened down again on Wednesday, with Hong Kong plunging more than three percent and Japan’s Nikkei sinking 2.7 percent.The foreign exchange markets also witnessed ructions, with the South Korean won falling to its lowest level against the dollar since 2009 on Tuesday.China’s offshore yuan also fell to an all-time low against the US dollar, as Beijing’s central bank moved to weaken the yuan on Wednesday for what Bloomberg said was the fifth day in a row.Oil prices slumped, with the West Texas Intermediate closing below $60 for the first time since April 2021.China also condemned remarks by US Vice President JD Vance in which he said the United States had for too long borrowed money from “Chinese peasants.”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 stability for the world’s economy, alongside “the need to avoid further escalation,” said an EU readout.The Chinese premier told von der Leyen that his country could weather the storm, saying it “is fully confident of maintaining sustained and healthy economic development.”The EU — which Trump has criticized bitterly over its tariff regime — may unveil its response next week to new 20 percent levies it faces.French President Emmanuel Macron called on Trump to reconsider, adding if the EU was forced to respond: “so be it.”In retaliation against US steel and aluminum levies that took effect last month, the EU plans tariffs of up to 25 percent on American goods ranging from soybeans to motorcycles, according to a document seen by AFP.- ‘Tailored deals’ -Trump said Tuesday his government was working on “tailored deals” with trading partners, with the White House saying it would prioritize allies like Japan and South Korea.His top trade official Jamieson Greer told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs.Wall Street’s major indices closed lower Tuesday, with the broad-based S&P 500 falling 1.6 percent.In one public sign of friction over tariffs, key Trump ally Elon Musk described senior White House trade advisor Peter Navarro as “dumber than a sack of bricks.”Musk, who has signaled his opposition to Trump’s trade policy, hit out after Navarro described his Tesla company as “a car assembler” that wants cheap foreign parts.burs-oho/hmn

Wall Street stocks sank again Tuesday while US oil prices hit a multi-year low as worries about President Donald Trump’s escalating trade wars erased rebound hopes following gains in Europe and Asia.After trillions of dollars were wiped from the combined value of global equity markets since last week, share prices across the globe clawed back some ground as investors assessed the possibility of Washington tempering some of the levies.Following winning sessions in Europe and Asia, US indices opened buoyantly as traders embraced talk of White House negotiations with Japan and South Korea in hopes that Trump’s trade onslaught might be short-lived.But investors grew edgy as the day progressed with no concrete progress and the White House confirmed plans for massive tariffs on China to go into effect overnight.”Obviously investors are clamoring for clarity and there still isn’t any,” said Jack Ablin of Cresset Capital, who estimated that the market now sees a greater than 50 percent chance of a US recession.The S&P 500 tumbled into the red in the early afternoon, with losses accelerating in the final 90 minutes of trading. The broad-based index finished down 1.6 percent at 4,982.77, its first close below 5,000 points in nearly a year.Oil prices also tumbled on the weakening economic outlook. West Texas Intermediate, the US benchmark futures contract, finished under $60 a barrel for the first time since April 2021.Stocks have been in free fall since Trump’s “Liberation Day” event announcing tariffs on major US trading partners last Wednesday.White House officials have signaled openness to dealmaking while blasting China for enacting sharp retaliatory tariffs in response to the new US levies.Trump plans to impose another 50 percent duty on Chinese goods at midnight, bringing the additional rate on Chinese products to 104 percent.European officials, meanwhile, plan tariffs of up to 25 percent on US goods in retaliation for levies on metals, but will spare bourbon to shield European wine and spirits from reprisals, according to a document seen by AFP.The list proposes levies on goods including soybeans, poultry, rice, sweetcorn, fruit and nuts, wood, motorcycles, plastics, textiles, paintings, electrical equipment, make-up and other beauty products.An EU spokesman said on Tuesday that the European Commission could present its planned countermeasures to the new levies “as early as next week”.- Rebound in Asia -Earlier Tokyo’s stock market closed up more than six percent — recovering much of Monday’s drop — after Japanese Prime Minister Shigeru Ishiba held talks with Trump.Hong Kong’s stock market closed up by more than one percent, having plunged more than 13 percent on Monday, its biggest one-day retreat since 1997.”After multiple punishing sessions, stock markets appear to have started their road to recovery,” noted Russ Mould, investment director at the AJ Bell trading group.He warned, however, that “it’s dangerous to think a massive rally will definitely happen, given how Trump is unpredictable”.- Key figures around 2130 GMT -New York – Dow: DOWN 0.8 percent at 37,645.59 (close)New York – S&P 500: DOWN 1.6 percent at 4,982.77 (close)New York – Nasdaq Composite: DOWN 2.2 percent at 15,267.91 (close)London – FTSE 100: UP 2.7 percent at 7,910.53 (close)  Paris – CAC 40: UP 2.5 percent at 7,100.42 (close)Frankfurt – DAX: UP 2.5 percent at 20,280.26 (close)Tokyo – Nikkei 225: UP 6.0 percent at 33,012.58 (close)Hong Kong – Hang Seng Index: UP 1.5 percent at 20,127.68 (close)Shanghai – Composite: UP 1.6 percent at 3,145.55 (close)Euro/dollar: UP at $1.0959 from $1.0912 on MondayPound/dollar: DOWN at $1.2766 from $1.2887Dollar/yen: DOWN at 146.23 yen from 146.84 yen Euro/pound: UP at 85.78 pence from 85.70 penceWest Texas Intermediate: DOWN 1.9 percent at $59.58 per barrelBrent North Sea Crude: DOWN 2.2 percent at $62.82 per barrelburs-jmb/dw

The United States and China hurtled towards an all-out trade war Tuesday, locked in a high stakes game of brinkmanship as President Donald Trump prepared to unleash a new wave of tariffs against dozens of partners.The global economy has been rocked since sweeping 10 percent US tariffs took effect over the weekend, triggering a dramatic market sell-off worldwide and sparking recession fears.Rates on imports to the United States from dozens of economies are set to rise further at 12.01 am (0401 GMT) Wednesday, and this will see tariffs imposed on Chinese products since Trump returned to the White House reach a staggering 104 percent.The new tariffs come after Beijing’s pushback against Trump, who remained defiant despite major US indexes tumbling again Tuesday.The US president believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States.But many business experts and economists question how quickly — if ever — this can take place, warning of higher inflation as the tariffs raise prices.Trump said Tuesday the United States was “taking in almost $2 billion a day” from tariffs.He originally unveiled a 34 percent additional tariff on Chinese goods. But after China unveiled its own 34 percent counter tariff on American products, he vowed to pile on another 50 percent duty.Counting existing levies imposed in February and March, that would take the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104 percent.Beijing blasted what it called US blackmail and vowed to “fight it to the end.”Trump insisted the ball was in China’s court because Beijing “wants to make a deal, badly, but they don’t know how to get it started.”Separately, Canada said that its tariffs on certain US auto imports will come into force Wednesday.- China ‘confident’ -In the war of words between the world’s two biggest economies, China also condemned remarks by US Vice President JD Vance in which he said the United States had for too long borrowed money from “Chinese peasants.”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 stability for the world’s economy, alongside “the need to avoid further escalation,” said an EU readout.The Chinese premier told von der Leyen that his country could weather the storm, saying it “is fully confident of maintaining sustained and healthy economic development.”China’s offshore yuan fell to an all-time low against the US dollar Tuesday, while oil prices slumped with the West Texas Intermediate closing below $60 for the first time since April 2021.The EU — which Trump has criticized bitterly over its tariff regime — may unveil its response next week to new 20 percent levies it faces.French President Emmanuel Macron called on Trump to reconsider, adding if the EU was forced to respond “so be it.”In retaliation against US steel and aluminum levies that took effect last month, the EU plans tariffs of up to 25 percent on American goods ranging from soybeans to motorcycles, according to a document seen by AFP.- ‘Tailored deals’ -Trump said Tuesday his government was working on “tailored deals” with trading partners, with the White House saying it would prioritize allies like Japan and South Korea.His top trade official Jamieson Greer told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs.Wall Street’s major indices closed lower Tuesday, with the broad-based S&P 500 falling 1.6 percent.Europe’s main indices finished with gains however, and Asia’s leading indices rose after heavy falls Monday.In one public sign of friction over tariffs, key Trump ally Elon Musk described senior White House trade advisor Peter Navarro as “dumber than a sack of bricks.”Musk, who has signaled his opposition to Trump’s trade policy, hit out after Navarro described his Tesla company as “a car assembler” that wants cheap foreign parts.Trump has ruled out any pause in his aggressive stance, despite China’s retaliation and growing domestic criticism.burs-bys/bgs

Stock markets regained some ground Tuesday, even as trade tensions between the United States and China were strained by turmoil over President Donald Trump’s tariffs offensive.Trump rocked the world economy last week when he held up a chart in the White House garden showing the tariffs being levied on each country.The move triggered a dramatic global market sell-off and fears of a widespread recession as he repeatedly doubled down on his aggressive trade policy.Steep tariffs come into effect against goods from a raft of nations on Wednesday, with Chinese products facing a stunning 104 percent levy after Beijing announced retaliatory measures, provoking a furious US reaction.China blasted what it called US blackmail and vowed to “fight it to the end,” a commerce ministry spokesperson said.The US president insisted that the ball was in China’s court because Beijing “wants to make a deal, badly, but they don’t know how to get it started.””We are waiting for their call. It will happen!” he wrote on social media Tuesday.- China ‘confident’ -In the war of words, China also condemned remarks by Vice President JD Vance in which he said the United States had for too long borrowed money from “Chinese peasants.”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 stability for the world’s economy as well as “the need to avoid further escalation,” according to a readout from EU officials.The Chinese premier told von der Leyen that the world’s number two economy could weather the economic storm.”China can fully hedge against adverse external effects, and is fully confident of maintaining sustained and healthy economic development,” he said.The EU — which Trump has criticized bitterly over its tariff regime — may unveil its response next week to the 20 percent levies it is facing under Trump.French President Emmanuel Macron called on the defiant US president to reconsider, adding if the EU was forced to respond “so be it.””France and Europe never wanted chaos,” he said.In retaliation for levies introduced in mid-March on steel and aluminum, the EU plans tariffs of up to 25 percent on US goods ranging from soybeans to motorcycles and make-up, according to a document seen by AFP.- Deals to be cut -Underlining Trump’s willingness to negotiate, White House advisor Kevin Hassett told Fox News that the administration would prioritize allies like Japan and Korea among the dozens of nations wanting to cut deals.Wall Street stocks rose Tuesday, as Trump reported a “great call” with South Korea’s leader.Europe’s main indices finished with gains of more than two percent, while Asia’s leading indices also rose after suffering heavy falls Monday.”Investors took advantage of lower valuations and grew more optimistic about US tariff negotiations,” said IG analyst Axel Rudolph.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 many business experts and economists question that, and say his tariffs are arbitrary.In a sign of friction, key Trump ally Elon Musk described senior White House trade advisor Peter Navarro as “dumber than a sack of bricks.”Musk has signaled his opposition to the tariffs, and he hit out after Navarro described his Tesla company as “a car assembler” that wants cheap foreign parts.The US president has ruled out any pause in his aggressive stance, despite retaliatory action from China and signs of criticism from within his Republican Party.”Nearly 50 countries have approached me personally to discuss the president’s new policy and explore how to achieve reciprocity,” Trump’s top trade official told the Senate. Several countries — including Argentina, Vietnam and Israel — had offered to reduce their tariffs, Jamieson Greer said.burs-bgs/des