Yvette Tan, Annabelle Liang and Kelly Ng
Reporting fromSingapore

Getty Images Xi Jinping, dressed in a dark blue suit and purple tie, arrives for a bilateral meeting at the Government Palace in Lima, Peru, on Thursday, Nov. 14, 2024. Getty Images
Xi Jinping has shown no signs that he will blink first in the tariff standoff with the US
The trade war between the world’s two biggest economies shows no signs of slowing down – Beijing has vowed to “fight to the end” hours after US President Donald Trump threatened to nearly double the tariffs on Chinashut out of the US market will go.

They will end up in other markets such as those in South East Asia, Ms Elms adds, and “these places [are dealing] with their own tariffs and having to think about where else can we sell our products?”

“So we are in a very different universe, one that is really murky.”

How does this end?
Unlike the trade war with China during Trump’s first term, which was about negotiating with Beijing, “it’s unclear what is motivating these tariffs and it’s very hard to predict where things might go from here,” says Roland Rajah, lead economist at the Lowy Institute.

China has a “wide toolkit” for retaliation, he adds, such as depreciating their currency further or clamping down on US firms.

“I think the question is how restrained will they be? There’s retaliation to save face and there’s pulling out the whole arsenal. It’s not clear if China wants to go down that path. It just might.”

Getty Images People can be seen crossing the road next to a blue screen with a stocks indicator in the Jing’an district in Shanghai on the evening of April 7, 2025.Getty Images
The Shanghai Composite fell by more than 7% on Monday as Asian stocks plunged
Some experts believe the US and China may engage in private talks. Trump is yet to speak to Xi since returning to the White House, although Beijing has repeatedly signalled its willingness to talk.

But others are less hopeful.

“I think the US is overplaying its hand,” Ms Elms says. She is sceptical of Trump’s belief that the US market is so lucrative that China, or any country, will eventually bend.