China urges US to meet 'halfway' amid escalating tit-for-tat tariffs

FILE - President Donald Trump, left, shakes hands with China's President Xi Jinping (AP Photo)

China on Thursday urged the United States to meet it "halfway" as US President Donald Trump imposed more levies on Chinese goods but, in a huge relief to global markets, paused tariffs on other countries.

Stocks on Wall Street, across Asia and Europe rocketed in reaction to Trump's announcement that he was halting a levy hike for almost all nations for 90 days.

But Trump also said he was raising tariffs on China to 125 percent from an earlier 104 percent, the latest salvo in an escalating standoff between the world's two largest economies.

The heightened tariffs against China took effect at the same time Thursday as retaliatory levies of 84 percent slapped on by Beijing on US imports.

China's commerce ministry warned the tariffs risked "severely" impacting the global economy, but stressed that "the door to dialogue is open".

"We hope the US will meet China halfway, and, based on the principles of mutual respect, peaceful coexistence and win-win cooperation, properly resolve differences through dialogue and consultation," Commerce Ministry spokeswoman He Yongqian said.

Beijing's foreign ministry also warned the tariff hikes were going "against the whole world".

Trump has predicted that trade deals will be made with all countries, including China, which has for now refused to roll back retaliatory tariffs on US goods.

"A deal's going to be made with China. A deal's going to be made with every one of them," Trump said at the White House. However, China's leaders "don't quite know how to go about it," he added.

As Beijing weighs the costs of further escalation, Bloomberg reported that its top leadership is meeting Thursday to hash out plans for additional stimulus to boost its fragile economy -- already ailing before the trade war.

'A little queasy'

Markets have been on a rollercoaster ride since Trump imposed a 10-percent baseline tariff on all countries and higher rates on key trading partners that he accused of cheating the United States, which activated on Wednesday.

But as markets swayed yet again, Trump said in a surprise announcement that he had authorised a 90 day pause on the higher tariffs -- although the baseline 10-percent rate remains.

Trump denied that he backtracked on the tariffs, saying he remains flexible.

"I saw last night where people were getting a little queasy," he said, as US bond yields rose during the stocks sell-off -- a major economic red light as American sovereign government debt is normally seen as a safe haven for investors in troubled times.

"What a day, but more great days coming!!!" he wrote on his Truth Social network later on Wednesday.

Trump's senior trade advisor Peter Navarro said "this will go down in American history as the greatest trade negotiating day we have ever had."

"We're in a beautiful position for the next 90 days" to seek trade deals with partners, he told ABC News, adding more than 75 have sought to negotiate with Washington.

China duel 

Japan -- which had been slapped with 24 percent under the so-called reciprocal tariffs -- said it welcomed the pause but still "strongly" demanded that Washington reconsider other levies on its steel and auto exports.

The 10-member Association of Southeast Asian Nations, for which the United States is their main export market, said on Thursday they would not impose any "retaliatory measures" and were ready for dialogue.

And Vietnam said it and the United States had agreed to start negotiations on a reciprocal trade agreement.

The European Union earlier launched its own counterattack, announcing measures targeting more than 20 billion euros' worth of US products.

'Kissing my ass' 

Wall Street stocks rocketed on Trump's pause announcement.

The S&P 500 surged 9.5 percent to 5,456.90, snapping a brutal run of losses over the past week.

Markets in Asia also rallied Thursday, with Hong Kong, Tokyo, Australia, Indonesia and Singapore sharply higher.

Taipei closed up a record 9.3 percent.

Stocks in Chinese economic powerhouse Shanghai were also up, despite Trump's decision to further hike tariffs.

And in Europe, markets rebounded sharply on the pause.

The EU's chief Ursula von der Leyen on Thursday welcomed Trump's decision to pause the tariff increases as an "important step towards stabilising the global economy".

Trump has said world leaders were rushing to negotiate "tailored" deals with the United States, with Japan and South Korea among those sending delegations to Washington.

"These countries are calling us up kissing my ass," Trump told a dinner with fellow Republicans on Tuesday night.

Trump believes his policy will revive America's lost manufacturing base by forcing companies to relocate to the United States.

The billionaire former property tycoon has particularly raged against China, accusing it of excess production and "dumping" inexpensive goods on other economies.