China urges US to reach a trade war deal

On Thursday, China urged the United States to meet it halfway in reaching an agreement to end the trade war between the two countries. The appeal came after President Donald Trump announced a temporary suspension of new tariffs on dozens of nations.

Beijing warned Washington that its tariffs could 'severely impact' global economic stability and urged the U.S. to pursue a compromise by meeting halfway.

"The door to dialogue is open, but it must be based on mutual respect and conducted on an equal footing," said Commerce Ministry spokeswoman He Yongqian, adding that otherwise China is prepared to "fight to the end."

On Wednesday, Trump announced a 90-day suspension of new tariffs for many countries—excluding China, which instead faced an increase to 125%—marking a new chapter in the ongoing standoff between the world’s two largest economies.

China had earlier responded with retaliatory tariffs of 84% on U.S. imports, which took effect on Thursday.

Trump denies backtracking on tariff strategy

While announcing the temporary halt to the tariffs, Trump insisted he had not reversed his overall tariff strategy.

"You have to be flexible," the Republican told reporters at the White House, justifying his decision. He admitted that last week's announcement of a tariff offensive had "scared investors a little" and made them "feverish."

He claimed that more than 75 countries have already tried to negotiate with Washington, and that the next 90 days would be used to reach trade agreements.

Although he approved a 90-day "pause" on the new tariffs, the president maintained the universal 10% tariff that took effect on Saturday. This measure already applies to most Latin American countries, excluding Belarus, Cuba, North Korea, and Russia.

A breather for the stock markets

After several days of turmoil, global markets caught a breather on Thursday. Asian stock markets rebounded sharply by the close of trading, while European markets opened on a similarly positive note.

After sharp declines the previous day, Asian markets mirrored the dramatic turnaround on Wall Street on Wednesday, where the Nasdaq surged 12% following Trump’s unexpected announcement.

Washington's trading partners also welcomed the Republican's decision.

A trade war that strains relations

The global trade war raises concerns about rising inflation, along with potential declines in consumption and economic growth.

Ngozi Okonjo-Iweala, the director general of the World Trade Organization (WTO), warned on Wednesday that the trade war could reduce goods trade between the world’s two largest economies by up to 80% and potentially erase nearly 7% of global GDP in the long term.

Furthermore, a diplomatic escalation between China and the U.S., already marked by tense relations, cannot be ruled out. Beijing has urged its citizens to exercise extreme caution when traveling to the United States.