China vowed on Tuesday to "fight to the end" after US President Donald Trump threatened to further ramp up tariffs but the EU warned against escalating a trade war as hard-hit global markets steadied.
Trump has upended the world economy with sweeping tariffs that have raised the spectre of an international recession, but has ruled out any pause in his aggressive trade policy despite a dramatic market sell-off.
Beijing — Washington's major economic rival but also a key trading partner -— responded by announcing its own 34 percent duties on US goods to come into effect on Thursday, deepening a showdown between the world's two largest economies.
The swift retaliation from China sparked a fresh warning from Trump that he would impose additional levies of 50 percent if Beijing refused to stop pushing back against his barrage of tariffs — a move that would drive the overall duties on Chinese goods to 104 percent.
"I have great respect for China but they cannot do this," Trump said at the White House. "We are going to have one shot at this... I'll tell you what, it is an honour to do it."
China swiftly hit back, blasting what it called "blackmailing" by the United States and vowing "countermeasures" if Washington imposes tariffs on top of the 34 percent extra that were due to come in force on Wednesday.
"If the US insists on going its own way, China will fight it to the end," a spokesperson for Beijing's commerce ministry said on Tuesday.
In a mounting war of words between Beijing and Washington, China's foreign ministry also condemned "ignorant and impolite" remarks by US Vice President JD Vance in which he complained the United States had for too long borrowed money from "Chinese peasants".
The ministry said that "pressure, threats and blackmail are not the right way to deal with China".
The European Union sought to cool tensions, with the bloc's chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese Premier Li Qiang.
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