Even if economists the world over and in the US disagree, President Trump continues to stand by his decision to impose tariffs until China agrees to a trade deal. On Tuesday, he tweeted, “Tariffs are a great negotiating tool.”

On Monday, Trump had announced that he was ready with the next round of tariffs on China in case Xi Jinping doesn’t meet him at the upcoming G20 summit. Meanwhile, China has neither confirmed this meeting nor is it backing down, vowing a tough response if the US continues to escalate the trade war.

According to Chinese Foreign Ministry spokesman Geng Shuang, China was open to trade talks on an equal footing and will fight to the end if US wants to build up trade frictions. Markets are worried about China’s response to further tariffs, which could include blacklisting US companies, banning rare earths exports to US markets, and imposing more retaliatory tariffs.