US President Donald Trump has said he is waiting to hear from China before a tariff of 104 per cent takes effect, but other administration officials have said they will not prioritise negotiations with Beijing.
Global markets steadied after days of carnage prompted by President Trump's sweeping levies, which have raised fears of recession and up-ended a global trading order that has been in place for decades.
US stocks posted gains after a bruising sell-off that has wiped out trillions of dollars since last week.
The US president has already implemented a 10 per cent tariff on almost all imports to the world's largest consumer market.
Targeted tariffs of up to 50 per cent on many trading partners are due to take effect on Wednesday.
China has refused to bow to what it called "blackmail" and vowed to "fight to the end" after Trump threatened to ratchet up tariffs to 104 per cent in response to China's decision to match "reciprocal" US duties announced last week.
"China also wants to make a deal, badly, but they don't know how to get it started. We are waiting for their call. It will happen!" the president said on his social media platform, Truth Social.
However administration officials said China would take a back seat to other countries in trade talks.
[THE WORLD IV]"The Chinese want to make a deal. They just don't know how to do it," White House press secretary Karoline Leavitt said on Tuesday.
"He [Donald Trump] believes China has to make a deal with the United States."
She added that if China reaches out, the US president would be "incredibly gracious, but he's going to do what's best for the American people."
Tariff negotiations continue
"Right now, we've received the instruction to prioritise our allies and our trading partners like Japan and Korea and others," White House economic adviser Kevin Hassett said on Fox News.
The Trump administration has set up negotiations with those two export-dependent countries, which could be hammered by the thicket of country and product-specific tariffs.
President Trump said on Tuesday he discussed tariffs, shipbuilding and potential energy deals in a "great" call with acting South Korean President Han Duck-soo.
"We have the confines and probability of a great DEAL for both countries. Their top TEAM is on a plane heading to the US, and things are looking good," he posted on social media.
He said they also discussed payment for US military protection.
Dozens of other governments have reached out as well, and Vietnam and Indonesia have offered to cut tariffs on some US imports.
Donald Trump's lead trade negotiator, Jamieson Greer, told Congress that his office is trying to work quickly but has no timeline for tariff negotiations.
"The president has been clear, again, that he's not doing exemptions or exceptions in the near term," Greer said.
China is bracing for a war of attrition, and manufacturers of goods from tableware to flooring are warning about profits, and scrambling to plan new overseas plants.
Citing rising external risks, Citi cut its 2025 China GDP growth forecast to 4.2 per cent from 4.7 per cent.
As the world's two biggest economies traded blows, China's Foreign Ministry criticised US Vice President JD Vance for saying the US borrows money "from Chinese peasants to buy the things those Chinese peasants manufacture."
Stocks bounce back as Europe mulls tariff response
Stock markets rebounded on Tuesday after days of loses which prompted some business leaders, including those close to the US president, to urge the president to reverse course.
European shares STOXX bounced off 14-month lows after four straight sessions of heavy selling, while global oil prices steadied after falling to four-year lows.
Wall Street's main indexes bounced back as well on hopes that President Trump might ease his tariffs.
The European Commission is considering counter-tariffs of 25 per cent on a range of American goods including soybeans, nuts and sausages, though other potential items like bourbon whiskey were left off the list.
The 27-member bloc is struggling with tariffs on autos and metals already in place, and faces a 20 per cent tariff on other products on Wednesday.
Donald Trump has also threatened to impose tariffs on EU alcoholic drinks.
European pharma companies warned the president of the European Commission, Ursula von der Leyen, that the tariffs would expedite the industry's shift away from Europe and towards the United States.
Reuters/ABC
