Donald Trump has admitted his tariffs on major trading partners will cause “a little disturbance” – as China said it was “ready” for “any type of war” with the US.

The US president made his comments in an address to Congress, hours after the levies on imports came into effect.

Producers in Mexico and Canada have been hit with a 25% tax on items they export to the US, while a 20% tariff has been applied to Chinese imports.

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Stock markets, which Mr Trump is said to pay close attention to, slid on the tariffs news.

Exporters in the affected countries as well as businesses in the US and economists have raised concerns about the potential price-raising impact of the tariffs.

Making imports more expensive will likely make goods more expensive and could push prices up across the board.

Concern over threat to interest rates

A cycle of high inflation could lead to interest rates being higher for longer in the US, the world’s largest economy, which could dampen economic activity.

A slowed US economy would have global consequences but even without a hit to the States, there are fears of a global trade war – in which countries add their own trade barriers in the form of tariffs.

The Chinese embassy in the US posted on X: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”

China imposes retaliatory tariffs

The president, however, said he was “just getting started” after 43 days into his second term.

China and Canada have retaliated with their own tariffs against the US.

From next week China will add its own 15% levy on a range of agricultural products such as chicken, wheat, corn and cotton.

An extra 10% will be added to soya beans, pork, beef, fruit, vegetables and dairy products imports.

The country has also raised additional complaints against the US with the World Trade Organisation (WTO).

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Speaking to Sky News presenter Yalda Hakim the US former deputy national security advisor Matt Pottinger said Chinese president Xi Jinping was turning the Chinese economy “into a wartime economy”

“He’s preparing his economy for war so that it can withstand the shocks of war,” he said on The World with Richard Engel and Yalda Hakim podcast

“That means he’s willing to undergo massive inefficiencies in the economy. He’s willing to stockpile food that otherwise would flow easily and more cheaply in from foreign vessels.”

“He’s stockpiling copper and all kinds of inputs into the economy. He is making sure that the private sector is wholly aligned with his broad goals, which are about increasing the Chinese Communist Party’s control over the economy and creating a bigger, better defence industrial base,” Mr Pottinger said.

“He’s preparing for war.”

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Compromise ‘as early as Wednesday’?

Canada’s prime minister Justin Trudeau said his country was launching its own WTO challenge and described the US tariffs as a “dumb thing to do”.

He also warned the move by the Trump administration would impact American workplaces and add to inflation in the US.

Addressing the American public, he said: “We don’t want this… but your government has chosen to do this to you.”

Canada has announced the imposition of 25% tariffs on US imports worth C$30bn (£16.3bn).

But US commerce secretary Howard Lutnick struck a different note on tariffs and on Monday said the president will “probably” announce a compromise with Canada and Mexico as early as Wednesday.

China’s premier has warned “changes unseen in a century are unfolding across the world” as a trade war with the US intensifies.

Li Qiang was speaking in parliament – a day after Washington slapped another 10% tariff on Chinese goods.

Beijing has responded with 10% to 15% tariffs on US food and agricultural products.

“Global economic growth lacks steam, unilateralism and protectionism are on the rise… the multilateral trading system is experiencing disruptions and tariff barriers continue to increase,” Premier Li added.

The Chinese Embassy in the US has also dialled up the pressure, writing on X: “If war is what the US wants, be it tariff war, a trade war or any other type of war, we’re ready to fight till the end.”

This statement was first made by China’s ministry of foreign affairs on Tuesday. The fact that China has repeated it two days in a row is significant.

It is a pointed message to the US that China’s patience is running out – and its rhetoric about the tit-for-tat tariffs is growing harsher. It has called the tariff war “pressure”, “blackmail”, a “smear campaign” and “shifting the blame”.

But Mr Trump loves imposing tariffs on China and appears convinced the pressure will work. He blames China for exporting the chemical precursors used to make fentanyl, which has fuelled the US opioid epidemic.

Meanwhile, China is facing severe economic challenges at home, with the country setting a growth target of “about 5%” for this year.

The government’s work report said a major task this year is to boost consumption and domestic demand.

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The problem in China is people aren’t spending enough money, instead they are cautiously saving. One reason for this is the weakness of China’s social welfare system. People save their money in case they lose their job, or to pay for health and elderly care.

The government says it wants to make domestic demand the engine of growth by turning several cities into “international consumption centres” – and expanding its trade-in system to encourage people to buy new products for the home.

Shopping aside, thousands of delegates from provinces across China attended including high-profile figures like former basketball star Yao Ming, and Lei Jun, who co-founded the electric vehicle manufacturing company Xiaomi.

After the session, delegates streamed into the square outside the Great Hall of the People. It is a chance to get their thoughts on the country’s future.

Congress delegate Liu Hui said: “I think tariffs will have little impact on China because we treat others the way they treat us.”

Another delegate from Shaanxi province, Song Yaping, is proud of China’s hi-tech prowess and said: “Our technology develops so fast, just look at DeepSeek, look at how fast our AI develops.”

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Despite the confidence, the trade war is deepening.

In the factory heartland of Guangzhou in southern China, a glassware exporter is bracing for the impact of the latest Trump tariffs.

Marketing manager Anna said: “I think the people will discuss these tariffs and of course 10% is a huge number. Some companies can’t make a profit from this.

“But we can’t change it. We just have to get used to it and let it be.”

Still, letting it be is not easy in a world where it feels like everything is changing fast.