'Avoid further escalation': EU chief calls for 'negotiated resolution' in Trump-triggered trade clash with China

European Commission President Ursula von der Leyen - File Photo

In a Tuesday phone call with Chinese Premier Li Qiang, European Commission President Ursula von der Leyen cautioned against the dangers of escalating a trade conflict triggered by the US's broad tariffs, according to the European Commission.

"The President called for a negotiated resolution to the current situation, emphasising the need to avoid further escalation," said a readout of the call, which came after Beijing vowed to "fight to the end" against fresh tariffs threatened by Trump.

Trump has upended the world economy with sweeping tariffs that have raised the spectre of an international recession, ruling 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 if Beijing refused to stop pushing back -- a move that would drive the overall levies on Chinese goods to 104 percent.

"In response to the widespread disruption caused by the US tariffs, President von der Leyen stressed the responsibility of Europe and China, as two of (the) world's largest markets, to support a strong reformed trading system, free, fair and founded on a level playing field," the EU commission said.

Brussels has so far refrained from hitting back at the sweeping 20 percent tariffs ordered by Trump on the bloc's imports, though it is readying a package of retaliation to earlier metals tariffs imposed by Washington.

EU states Monday rallied behind a push to avert an all-out trade war through negotiations with Washington.

Von der Leyen said Monday the EU had offered the United States a bilateral tariff exemption for cars and other industrial goods, which Trump later deemed insufficient.

In her Tuesday call with Li, the German politician also addressed European fears that US tariffs will lead to a flood of Chinese goods into the 27-nation bloc.

"Von der Leyen emphasised China's critical role in addressing possible trade diversion caused by tariffs, especially in sectors already affected by global overcapacity," the readout said.

"The leaders discussed setting up a mechanism for tracking possible trade diversion and ensuring any developments are duly addressed."

(With AFP inputs)