China reaches out to EU, ASEAN members to take on US tariffs

A container ship leaves Kwai Chung Container terminal in Hong Kong. PIC/AFP

China is reaching out to other nations as the US layers on more tariffs in what appears to be an attempt to form a united front to compel Washington to retreat. However, days into the effort, it's meeting only partial success with many countries unwilling to ally with the main target of President Donald Trump's trade war.

China forging new ties

China has thus far focused on Europe, with a phone call between Premier Li Qiang and European Commission President Ursula von der Leyen. "China is willing to work with the EU to jointly implement the important consensus reached by the leaders of China and the EU, strengthen communication and exchanges, and deepen China-EU trade, investment and industrial cooperation," the official Xinhua News Agency reported. That was followed by a video conference between Chinese Commerce Minister Wang Wentao and EU Commissioner for Trade and Economic Security Sefcovic on Tuesday to discuss the US "reciprocal tariffs".

Wang has also spoken with the 10-member Association of Southeast Asian Nations (ASEAN), while Li, the premier, has met with business leaders. China has "already made a full evaluation and is prepared to deal with all kinds of uncertainties, and will introduce incremental policies according to the needs of the situation," Xinhua quoted Li as saying.

Trump backs down

Facing the cratering of global markets, Trump on Wednesday backed off his tariffs on most nations for 90 days, saying countries were lining up to negotiate more favourable conditions. China has refused to seek talks, saying it would "fight to the end" in a tariff war, prompting Trump to further jack up the tax rate on Chinese imports to 125 per cent. China has retaliated with tariffs on US goods of 84 per cent, which took effect on Thursday.

Asia shares, US stocks soar

World markets soared on Thursday, with Japan's benchmark jumping more than 9 per cent, as investors welcomed Trump's decision. Germany's DAX initially gained more than 8 per cent. It was up 7.5 per cent at 21,141.53 a bit later, while the CAC 40 in Paris gained 7.2 per cent to 7,360.23. Britain's FTSE 100 surged 5.4 per cent to 8,090.02. Chinese shares saw more moderate gains, given yet another jump in the tariffs each side is imposing on each others' exports.US futures edged lower and oil prices also declined. The future for the S&P 500 was down 0.4 per cent while that for the Dow Jones Industrial Average edged 0.2 per cent lower.

EU backs US tariff pause

Von der Leyen has welcomed Trump's pause of reciprocal tariffs for dozens of countries, calling it a necessary move to help stabilise the global economy. She also reaffirmed the EU's commitment to open and fair trade. "EU is committed to constructive negotiations towards achieving frictionless, mutually beneficial trade," she said.

Mexico, Brazil to boost trade

The leaders of Mexico and Brazil said they would work to strengthen trade between Latin America's two biggest economies as a counterweight to Trump's shifts on global tariffs. Mexican President Claudia Sheinbaum and Brazilian President Luiz Inácio Lula da Silva met on the sidelines of a regional summit in Honduras, where leaders strategised how to respond Trump's tariffs and escalating deportations.

Iran faces new sanctions

The US has issued new sanctions targeting Iran's nuclear programme, days before senior American and Iranian officials are expected to hold talks in the Middle East sultanate of Oman. Five entities and one person based in Iran are cited in the sanctions.

Trump's tip made money for investors

When Donald Trump offered some financial advice on Wednesday morning, stocks were wavering between gains and losses. But that was about to change. "THIS IS A GREAT TIME TO BUY!!! DJT," he wrote on his social media platform Truth Social at 9.37 am. Less than four hours later, Trump announced a 90-day pause on nearly all his tariffs. Stocks soared on the news, closing up 9.5 per cent by the end of trading on Wednesday.

This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever