China vows to 'fight to the end' as US tariff war rages

China vowed not to bow to "blackmail" from the United States as a global trade war ignited by US President Donald Trump's sweeping tariffs showed little sign of abating on Tuesday, even as battered stock markets steadied.

The rebuke came after Trump threatened to ratchet up tariffs on US imports from the world's No. 2 economy to more than 100 per cent on Wednesday in response to Beijing's decision to match 'reciprocal' duties Trump initially unveiled last week.

"The US side's threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American side's blackmailing nature," China's commerce ministry said.

"If the US insists on having its way, China will fight to the end."

The European Union proposed counter-tariffs of its own to Trump's tariff onslaught that swept up dozens of countries, sent financial markets into a tailspin and fuelled expectations that the global economy may be headed for recession.

Stock markets found a firmer footing after a gut-wrenching few days for investors which prompted some business leaders, including those close to Trump, to urge the president to reverse course.

Japan's Nikkei index rose six per cent on Tuesday, rebounding from a 1-1/2-year low hit in the previous session, after Trump and Japanese Prime Minister Shigeru Ishiba agreed to open trade talks.

US Secretary of State Marco Rubio also spoke to his Pakistani counterpart about tariffs and future trade relations.

Chinese blue chips climbed one per cent, recouping a fraction of the more than seven per cent slide on Monday. Hong Kong's Hang Seng Index .HSI jumped around two per cent after suffering the worst day since 1997 as a result of what the trading hub's leader called "ruthless" tariffs.

US stock futures also pointed higher after slumping to the lowest level in more than a year.

Indonesian markets were slammed, however, with stocks shedding nine per cent and the rupiah currency ploughing a record low as trading resumed on Tuesday after an extended holiday. Its central bank pledged to intervene, joining efforts by other global authorities to stem the rout in recent days.

Trump said the tariffs, a minimum of 10 per cent for all US imports, with targeted rates of up to 50 per cent, would help the United States recapture an industrial base that he says has withered over decades of trade liberalisation.

"It's the only chance our country will have to reset the table. Because no other president would be willing to do what I'm doing, or to even go through it," he told reporters at the White House.

The European Commission, meanwhile, proposed counter-tariffs of 25% on a range of U.S. goods, including soybeans, nuts and sausages.