*

Markets tumble amid Trump's escalating trade war with

China

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U.S. Treasury Secretary Bessent says 75 countries want

trade

talks

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China rejects Trump threats, pledges to follow through if

U.S.

persists

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Japan readies task force for trade talks

By Liz Lee and Jeff Mason

BEIJING/WASHINGTON, April 11 (Reuters) - A week of

turmoil unleashed by U.S. President Donald Trump's tariffs

showed little sign of easing on Friday, with markets again

tumbling and foreign leaders trying to work out how to respond

to a dismantling of the world trade order.

Battered financial markets were given a brief reprieve

Wednesday when Trump decided to pause duties on dozens of

countries for 90 days. However, his escalating trade war with

the world's No.2 economy, China, has fuelled fears of recession

and further retaliation.

U.S. Treasury Secretary Scott Bessent tried to assuage

skeptics by telling a cabinet meeting on Thursday that more than

75 countries wanted to start trade negotiations, and Trump

himself expressed hope of a deal with China.

But the uncertainty in the meantime extended some of the

most volatile trading since the early days of the COVID-19

pandemic.

The S&P 500 index ended 3.5% lower on Thursday and is

now down about 15% from its all-time peak in February. Some

analysts believe stocks have further to fall due to the

uncertainty surrounding the U.S. tariff policy.

Asian indices followed Wall Street lower on Friday with

Japan's Nikkei down nearly 5% and Hong Kong stocks

heading towards the biggest weekly decline since 2008.

Oil prices are also set to drop for a second straight week.

Bessent on Thursday shrugged off the renewed market sell-off

and predicted that striking deals with other countries would

bring more certainty.

The U.S. and Vietnam agreed to begin formal trade talks

after Bessent spoke with Vietnamese Deputy Prime Minister Ho Duc

Phoc, the White House said.

Japanese Prime Minister Shigeru Ishiba has set up a task

force for the negotiations, headed by his close aide, that hopes

to visit Washington next week, according to local media.

Trump's tariff pause excluded China. Instead he ratcheted up

tariffs on Chinese imports, raising them effectively to 145%

when levies imposed earlier this year are taken into account, as

punishment for Beijing's move to match his earlier duties.

Chinese officials have been canvassing other trading

partners about how to deal with the U.S. tariffs, most recently

talking to counterparts in Spain, Saudi Arabia and South Africa.

Trump told reporters at the White House he thought the

United States could make a deal with China, but he reiterated

his argument that Beijing had "really taken advantage" of the

U.S. for a long time.

"I'm sure that we'll be able to get along very well," Trump

said, adding that he respected Chinese President Xi Jinping. "In

a true sense he's been a friend of mine for a long period of

time, and I think that we'll end up working out something that's

very good for both countries."

China rejected what it called threats and blackmail from

Washington and pledged to follow through to the end if the U.S.

persists, Commerce Ministry spokesperson He Yongqian told a

regular press briefing on Thursday. China's door was open to

dialogue, but this must be based on mutual respect, the ministry

said.

Beijing also restricted imports of Hollywood films,

targeting one of the most high-profile American exports.

The U.S. tariff pause also does not apply to duties paid by

Canada and Mexico, whose goods are still subject to 25%

fentanyl-related tariffs unless they comply with the

U.S.-Mexico-Canada trade agreement's rules of origin.

With trade hostilities persisting among the top three U.S.

trade partners, Goldman Sachs estimates the probability of a

recession at 45%.

The rollback on the other tariffs did little to lower the

overall average import duty rate, according to Yale University

researchers. The average effective tariff rate is the highest in

more than a century, the Yale Budget Lab wrote on Thursday.

One reprieve in the global trade wars came when the European

Union said it would pause its first counter-tariffs.

"We want to give negotiations a chance," European Commission

President Ursula von der Leyen said on X, while also warning

that counter-tariffs could be reinstated if negotiations "are

not satisfactory."

The EU had been due to launch counter-tariffs on about 21

billion euros ($23 billion) of U.S. imports next Tuesday in

response to Trump's 25% tariffs on steel and aluminium. It is

still assessing how to respond to U.S. car tariffs and the

broader 10% levies that remain in place.

Trump has claimed the U.S. was now collecting $2 billion a

day from his tariffs.

But that appeared to be an overstatement given that the

Treasury on Thursday reported that gross customs duties in March

totaled $8.75 billion, up by about $2 billion from a year

earlier and the highest since September 2022. The increase is

partly due to Trump's tariff increases since February, a

Treasury official said.