The world's top two economies have edged closer to a trade war after Trump slapped more tariffs on all Chinese goods. China quickly retaliated imposing 10-15% tariffs on US farm products. "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's embassy said on X, reposting a line from a government statement on Tuesday.

It is some of the strongest rhetoric so far from China since Trump became president and comes as leaders gathered in Beijing for the annual National People's Congress.

On Wednesday, China's Premier Li Qiang announced that China would again boost its defence spending by 7.2% this year, and warned that "changes unseen in a century were unfolding across the world at a faster pace." This increase was expected and matches the figure announced last year. Leaders in Beijing are trying to send a message to people in China that they are confident the country's economy can grow, even with the threat of a trade war. China has been keen to portray an image of being a stable, peaceful country in contrast to the US, which Beijing accuses of being embroiled in wars in the Middle East and Ukraine.

China may also hope to capitalise on Trump's actions relating to US allies such as Canada and Mexico, which have also been hit by tariffs, and will not want to ramp up the rhetoric too far to scare off potential new global partners.