US markets close with some gains following fluctuations in global stocks over Donald Trump's tariffs
China raised import taxes on US goods to 125%, in response to a 145% levy on some of its goods imported to America
"The fight will only be short term": People in China tell the BBC how they think the trade war will affect them
The US dollar falls to a three-year low as Deutsche Bank says "the damage has been done"
Trump says the US is "doing really well on our tariff policy" and "it is moving along quickly", as the White House says tariffs are "necessary to make America wealthy again"
How is the trade war with the US affecting people in China?
Let's take a look at where stock markets are trading today in the Asia-Pacific region.
Shares are holding on to this morning's gains, with less than an hour until new Chinese tariffs on the US are due to take effect.
Here's where markets currently stand:
China has filed another complaint with the World Trade Organization (WTO), accusing Trump of engaging in "bullying" tactics.
"[Washington's] 50% tariff increase is a mistake on top of a mistake, highlighting the unilateral bullying nature of the US measures," the commerce ministry said on Wednesday.
Beijing "will firmly safeguard its legitimate rights and interests in accordance with the WTO rules, and resolutely uphold the multilateral trading system and the international economic and trade order,” a spokesman said.
Image source, Reuters
Image source, AFP via Getty ImagesProf Graham Allison says Chinese leaders believe the US is "irreversibly declining"
Professor Graham Allison, who has recently returned from China where he met key leaders, tells the BBC's World Business Report radio programme that President Xi Jinping has been preparing for an economic face-off with America for some time.
The US political scientist says Xi "appreciated that there was a risk that the US and China would find themselves in an economic war, and he was preparing for "choppy waters".
"At least from all the evidence that I’ve seen they’ve been preparing in each of the departments, each arena to be resilient if something like this should happen. And to retaliate in kind."
Allison, the author of the book Destined for War: Can America and China Escape Thucydides’s Trap?, says China is now "playing a long game".
He says Beijing believes "in a grand narrative that China is inexorably rising and that the US is irreversibly declining."
Although Chinese leaders realise that the current tariff war is a "lose-lose" situation, they believe they can deal with the situation better than Washington, the professor says.
“My bet is Xi is preparing for a pretty tough trade war… and they think that Chinese are probably better at suffering than Americans are.”
Image source, Getty ImagesTrump may have announced a 90-day pause for countries hit by higher US tariffs, but his trade war with China has escalated - along with diplomatic tensions.
China's culture and tourism ministry has issued a travel advisory telling its citizens to "travel with caution" and "fully assess the risks" before going to the US.
It cited a "“deterioration of China-US economic and trade relations and the domestic security situation in the United States".
China now faces a whopping 125% tariff, as Beijing is set to impose an 84% levy on US goods.
The country's education ministry issued a separate warning, telling all overseas students to "conduct safety risk assessments" when deciding whether to study in the US.
This warning comes in response to the a bill passed in Ohio which aims to restrict "foreign influence" from China in state universities.
Annabelle Liang
Business reporter, Singapore
It's getting increasingly difficult to believe that just over a week ago, US tariffs on China stood at 20%.
The levies have since ballooned to 104% and now 125% with Trump's latest tariffs salvo.
While the numbers are astonishing, analysts say they are way past the threshold for Chinese businesses trying to make profits by exporting goods to America.
"At these levels, the damage from added tariffs is likely to be greatly diminished," says Louise Loo from the Oxford Economics consultancy.
Firms may be forced to sell to goods to Chinese consumers instead "as other countries are already taking steps to fend off the prospect of a flood of Chinese exports landing on their shores," says Eswar Prasad, a professor specialising in trade policy at Cornell University.
With exports being so important to China's economy, it will be up to policymakers to stimulate consumption, he adds.
This could be an uphill task as China's economy has slipped into deflation, with the official measure of consumer prices falling for a second month straight in March.
There is also the possibility that China could devalue its currency further. A weaker yuan makes Chinese exports cheaper to buy with foreign currencies.
The yuan fell to a 19-month low against the dollar on Thursday.
"It would have wider ramifications on sentiment and capital flows so [China doesn't] seem keen to use it," says Priyanka Kishore from the Asia Decoded research firm. "But exceptional times can call for exceptional measures."
Image source, Getty ImagesMany Chinese firms currently sell goods to the US
Image source, Getty ImagesLeaders of more than 30 countries from Latin America and the Caribbean have promised to take measures to boost trade within the region to minimise the impact of President Trump's tariffs.
At the leaders' summit in Honduras, Brazilian president Luiz Inacio Lula da Silva said that arbitrary tariffs would destabilise the international economy and cause inflation.
Mexico's president Claudia Sheinbaum said they "require unity and solidarity among their governments and peoples and to strengthen greater regional integration"
Both leaders said, however, they would try to negotiate with the Trump administration before considering retaliatory tariffs.
Analysts say the tariffs may increase Chinese economic presence in Latin America and the Caribbean. China was invited to attend the summit as a special guest.
As President Trump ups the ante of tariffs on China, the world's second largest economy has shown no signs of backing down.
Here is a summary of what has happened so far:
Image source, Getty ImagesSuddenly, Donald Trump's trade war is in much sharper focus.
Rather than a fight on all fronts against the world, this now looks far more like a fight on familiar Trumpian territory: America v China.
What happens next depends on two key questions:
To understand just how central this is to the US president's thinking, you need to go back to the time before anyone ever thought of him as a possible candidate for office, let alone a likely winner.
Read more of the analysis from BBC's Senior North America correspondent John Sudworth.
Image source, Getty ImagesAustralia's defence minister Richard Marles has dismissed an appeal from China to unite in the face of Trump's tariffs and economic uncertainty.
In an opinion piece for Australian newspapers, Chinese ambassador to Australia Xiao Qian wrote that "under the new circumstances, China stands ready to join hands with Australia and the international community".
But Marles, who's also the deputy prime minister, said that the US ally was "not about to make common cause with China".
"I don't think we'll be holding China's hand," he told Australia's Nine News.
“We don’t want to see a trade war between America and China, to be clear, but our focus is on actually diversifying our trade.”
Shares in mainland China and Hong Kong have opened higher.
In early trading, the Shanghai Composite index rose by 1.3%. The Hang Seng gained 3%.
Beijing is set to retaliate against US taxes by putting 84% levies on American imports at 12:01 local time (05:01 BST).
All eyes are on mainland China and Hong Kong as their markets are set to open.
It comes after Trump hit Beijing with an even higher levy of 125%, even as he paused higher tariffs on the rest of the world.
Annabelle Liang
Business reporter, Singapore
Image source, Getty ImagesAs we've been reporting, Asia-Pacific markets have soared after President Trump's stunning reversal on most reciprocal tariffs.
Here's where some major markets currently stand:
"The greater majority of countries have capitulated in the tariff war with President Trump and this has been extremely well received by the equity markets," said Peter McGuire from brokerage firm Trading.com.
Image source, Getty ImagesThe US and Vietnam have agreed to start negotiations for a trade agreement and will consider removing as many non-tariff barriers as possible, the Vietnamese government said in a statement on Thursday.
Vietnam has pledged to facilitate US investment in the country and combat trade fraud, the statement said.
The announcement comes hours after Trump paused a 46% tariff on Vietnam.
Trump's tariffs are a huge blow to Vietnam, where exports to the US make up 30% of its GDP. For more context on Vietnam's trade ties with the US, read our story.
Shares in Taiwan jumped on Thursday morning.
The benchmark Taiex index was more than 9% higher in early trading.
Image source, Getty ImagesSouth Korean Trade Minister Cheong In-kyo says the tariff pause has given the key US ally room for negotiation.
While the pause is "positive", Cheong tells reporters, talks with Washington are still needed to minimise the impact of the tariffs.
Cheong met US Trade Representative Jamieson Greer in Washington this week to negotiate the 25% tariff South Korea faced.
Anthony Zurcher
North America correspondent in Washington DC
Image source, ReutersFor days, Donald Trump and his White House team had insisted they were fully committed to their decision to impose sweeping "reciprocal" tariffs on dozens of countries. They even derided a report on Tuesday that said the president was considering a 90-day pause - news that triggered a brief stock market surge.
But now that pause on higher tariff rates, with a few notable exceptions, is a reality. The reordering of the global economic order is on hold, and Trump's promise of a golden age of American manufacturing will have to wait.
The White House has said that going big on tariffs and then hitting the pause button, before entering negotiations with individual countries, was the plan all along.
"We've had more than 75 countries contact us, and I imagine, after today, there will be more," Treasury Secretary Scott Bessent told reporters shortly after the announcement.
That framing from the White House is not surprising, of course. And it is difficult to ignore the investor panic, tumbling bond market and growing public disapproval that preceded the announcement.
So was it a strategic retreat in the face of unexpected resistance, or yet another example of Trump's "art of the deal" negotiating strategy at work?
In the end, the thought process behind Trump's decision may not really matter.
The reality is that the US is now making nice – or at least nicer - with nations that had faced their retaliatory trade fire. It is letting the stock market bounce back, and leaning into a trade war with China which the president hit with 125% tariffs.
That will have global economic repercussions of its own, but it is more in line with recent American foreign policy - including that of Democratic President Joe Biden - as it seeks to constrain Chinese ambitions.
The big unknown, however, is whether Trump's actions over the past week – setting allies scrambling and threatening the established global order – will have made such a strategy more difficult to pursue.
And in 90 days, when Trump's pause expires, this week's economic drama and uncertainty could begin all over again.
Asia-Pacific financial markets are extending their gains in early trading.
Japan's Nikkei 225 index has soared by more than 8%.
South Korea's Kospi and Australia's ASX 200 gained around 5%.
President Trump's move to pause higher tariffs have been a lifeline for Asia financial markets, which are "flipping the switch from fear to euphoria," according to one analyst.
Most exporters in the region are breathing "a massive sigh of relief," said Stephen Innes from the SPI Asset Management firm.
"Even with China still sitting in Trump's 125% crosshairs, it's now a manageable risk - especially as global recession... bets get unwound," he added.
"This isn't just a relief bounce; it's a full blown sentiment flip."
Image source, GetTrading is set to start in Taiwan after Trump paused higher tariffs on most of the world.
Shares in the home of technology giants like computer chip producer TSMC and iPhone maker Foxconn have been on a rollercoaster since the US president announced his new trade policies last week.