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Trump threatens additional 50% tariff for China

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Beijing censures escalation as "blackmail"

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EU floats 25% counter-tariffs on US

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Asian equities regain ground after sell-off

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European, U.S. stock markets also set to open up

By Joe Cash and Steve Holland

BEIJING/WASHINGTON, April 8 (Reuters) - China refused to

bow to what it called "blackmail" from the United States as a

global trade war ignited by President Donald Trump's sweeping

tariffs showed little sign of abating on Tuesday, even as

battered stock markets steadied.

Beijing's rebuke came after Trump threatened to ratchet up

tariffs on U.S. imports from the world's No. 2 economy to more

than 100% on Wednesday in response to China's decision to match

'reciprocal' duties Trump initially unveiled last week.

"The U.S. 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," China's commerce ministry

said.

"If the U.S. insists on having its way, China will fight to

the end."

Chinese manufacturers

of goods from tableware to flooring are flagging profit

warnings, scrambling to plan new overseas plants and haggling

with customers over prices as they reel from the tariffs.

The European Union proposed counter-tariffs of its own to

Trump's tariff onslaught that swept up dozens of countries, sent

financial markets into a tailspin and fuelled expectations that

the global economy may be headed for recession.

Stock markets found a firmer footing after a gut-wrenching

few days for investors which prompted some business leaders,

including those close to Trump, to urge the president to reverse

course.

Japan's Nikkei index rose 6% on Tuesday, rebounding from a

1-1/2-year low hit in the previous session, after Trump and

Japanese Prime Minister Shigeru Ishiba agreed to open trade

talks.

Chinese blue chips climbed 1%, clawing back

some of the more than 7% slide on Monday. Hong Kong's Hang Seng

Index jumped 2% after suffering the worst day since 1997

due to what the trading hub's leader called "ruthless" tariffs.

European and U.S. stock futures also

pointed to a firmer opening after several days of losses while

global oil prices rebounded following a hefty sell-off.

Indonesian markets were slammed, however, with stocks

shedding 9% and the rupiah currency ploughing a record low as

trading resumed on Tuesday after an extended holiday. Its

central bank pledged to intervene, joining efforts by other

global authorities to stem the rout in recent days.

Trump said the tariffs - a minimum of 10% for all U.S.

imports, with targeted rates of up to 50% - would help the

United States recapture an industrial base that he says has

withered over decades of trade liberalization.

"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.

EUROPE EYES COUNTER-MEASURES

The European Commission, meanwhile, proposed counter-tariffs

of 25% on a range of U.S. goods, including soybeans, nuts and

sausages, though other potential items like bourbon whiskey were

left off the list, according to a document seen by Reuters.

Officials said they stood ready to negotiate a "zero for

zero" deal with Trump's administration. "Sooner or later, we

will sit at the negotiation table with the U.S. and find a

mutually acceptable compromise," EU Trade Commissioner Maros

Sefcovic said at a news conference.

The 27-member bloc is struggling with tariffs on autos and

metals already in place, and faces a 20% tariff on other

products on Wednesday. Trump has also threatened to slap tariffs

on EU alcoholic drinks.

Facing some of the steepest duties set to be imposed

globally, low-cost manufacturing hub Vietnam has requested a

45-day delay and said it will buy more American goods, including

defence and security products, to rebalance trade.

Investors and political leaders have struggled to determine

whether Trump's tariffs are permanent or a pressure tactic to

win concessions from other countries.

U.S. Treasury Secretary Scott Bessent met with Trump in

Florida on Sunday, Politico reported, to urge him to emphasize

striking trade deals with partners in order to reassure the

markets that there is an endgame to the U.S. strategy.

Administration officials say dozens of other countries have

reached out with the hope of heading off the tariffs due to take

effect on Wednesday.

Trump administration officials say the president is

following through on a promise to reverse decades of trade

liberalization that he believes has undercut the U.S. economy.

"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. "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."

BUSINESS LEADERS BAULK

Wall Street leaders issued warnings on U.S. tariffs, with

JPMorgan Chase ( JPM ) CEO Jamie Dimon saying they could have

lasting negative consequences, while fund manager Bill Ackman

said they could lead to an "economic nuclear winter."

Ackman is one of a handful of Trump supporters who

questioned the strategy. Billionaire Elon Musk, who is leading

Trump's effort to slash government spending, called for zero

tariffs between the U.S. and Europe over the weekend. He has

also appealed directly to Trump to reverse the tariffs, the

Washington Post reported.

On Monday, Trump trade adviser Peter Navarro dismissed the

Tesla CEO as a "car assembler."

Investors are now betting that the growing risk of recession

could prompt the U.S. Federal Reserve to cut rates as early as

next month. Trump repeated his call for the central bank to

lower rates on Monday, but Fed chief Jerome Powell has so far

indicated he is in no rush.