The President of the European Commission has urged China to pursue a negotiated resolution to the tensions sparked by widespread import tariffs introduced by US President Donald Trump, reports RTE.
During a phone discussion with Chinese Premier Li Qiang, Ursula von der Leyen “stressed the responsibility of Europe and China, as two of world’s largest markets, to support a strong reformed trading system, free, fair and founded on a level playing field,” according to a statement from her office.
Von der Leyen and Li also talked about establishing a system to monitor potential trade shifts caused by the tariffs, her office reported, noting the EU’s concern that China may reroute inexpensive exports away from the US toward Europe, reports RTE.
This conversation followed China’s pledge to “fight to the end” against the proposed 50% tariffs from Mr Trump, a move that escalated a trade conflict already causing significant damage to global financial markets.
Last week, Mr Trump disrupted the global economy with extensive tariffs, increasing fears of a worldwide recession, yet he has dismissed suggestions of pausing his hardline trade stance despite a major market downturn, reports RTE.
In response, China—America’s main economic competitor—declared its own retaliatory 34% tariffs on US products, effective Thursday, intensifying the standoff between the two largest economies globally.
Following China’s quick countermeasures, Mr Trump issued a new threat to raise duties further if China didn’t stop retaliating—potentially hiking total tariffs on Chinese imports to 104%.
“I have great respect for China but they can not do this,” Mr Trump said in the White House, reports RTE.
“We are going to have one shot at this… I’ll tell you what, it is an honour to do it,” reports RTE.
In response, China’s commerce ministry issued a statement: “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.”
“If the US insists on having its way, China will fight to the end,” it added, reports RTE.
The European Union announced its own counter-tariffs following Mr Trump’s wide-reaching tariff policy that affected many nations, rattled financial markets, and fueled concerns of a potential global economic downturn.
Markets showed signs of stabilization after a turbulent period that led some business figures, even among Mr Trump’s allies, to call on him to reconsider his course, reports RTE.
Japan’s Nikkei index jumped 6%, recovering from a previous 1.5-year low, following a phone call between Mr Trump and Japanese Prime Minister Shigeru Ishiba in which they agreed to begin trade negotiations.
China’s top stock index gained 0.7%, regaining a small portion of its earlier 7% loss.
Hong Kong’s Hang Seng Index rose 2%, rebounding from its worst trading day since 1997, reports RTE.
US stock futures were also up after a highly volatile session that saw the market reach its lowest point in over a year.
Mr Trump explained that the tariffs—starting at 10% for all US imports, with some items facing rates as high as 50%—were meant to help restore America’s diminished industrial sector, reports RTE.
“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.
In parallel, the European Commission outlined a plan for 25% retaliatory tariffs on US products such as soybeans, nuts, and sausages, though items like bourbon whiskey were notably omitted, according to a document reviewed by Reuters, reports RTE.
Officials said they were prepared to negotiate a “zero for zero” arrangement with Mr Trump’s team.
“Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise,” EU Trade Commissioner Maroš Šefčovič said at a news briefing.
The EU is already grappling with tariffs on its auto and metal sectors, with the threat of an additional 20% tariff looming. Mr Trump has also warned of potential duties on European alcoholic beverages, reports RTE.
Uncertainty lingers among investors and leaders as to whether Mr Trump’s tariffs are a long-term policy or a negotiating tool to extract better trade terms.
According to Politico, US Treasury Secretary Scott Bessent met with Mr Trump in Florida on Sunday to encourage him to focus on forming trade agreements to signal a clear objective in the US trade agenda.
The administration claims that many countries have reached out in hopes of avoiding the tariffs, which are scheduled to begin tomorrow, reports RTE.
Officials in the Trump administration argue that the president is delivering on a promise to roll back decades of trade liberalization that he believes have harmed US industries.
“He’s doubling down on something that he knows works, and he’s going to continue to do that,” White House economist Kevin Hassett said on Fox News, reports RTE.
“But he is also going to listen to our trading partners, and if they come to us with really great deals that advantage American manufacturing and American farmers, I’m sure he’ll listen,” he added, r r
Leaders on Wall Street have voiced concerns over the tariff strategy. JPMorgan Chase CEO Jamie Dimon warned of potentially long-term damage, while investor Bill Ackman said it could trigger an “economic nuclear winter.”
Mr Ackman, one of Mr Trump’s few vocal supporters, expressed doubts about the approach, reports RTE.
Billionaire Elon Musk, who is assisting Mr Trump in cutting government costs, over the weekend advocated for the elimination of tariffs between the US and Europe.
Yesterday, Trump’s trade adviser Peter Navarro brushed off the Tesla CEO, calling him a “car assembler,” reports RTE.
Investors now speculate that the heightened risk of recession could push the Federal Reserve to reduce interest rates as soon as next month.
Mr Trump renewed his call for the central bank to lower rates yesterday, although Fed Chair Jerome Powell has shown little urgency on the matter, reports RTE.
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