Trump's game of chicken over tariffs leaves world guessing

A day before Donald Trump's "reciprocal" tariffs are scheduled to kick in, the US president appears locked in a high-stakes game of chicken, with the world's economy hanging in the balance.

Some nations labelled "worst offenders" are scrambling to make nice with the White House to end this game before it reaches a potentially devastating climax.

China, in contrast, is playing a different game, one of retaliation and resistance.

Meanwhile, Trump has pressed ahead, even as some allies – in Congress and on Wall Street – wonder if he's going too far. On Sunday, when asked what level of market fall he would tolerate before changing course, he snapped that it was a "stupid question".

So is it all a negotiating tactic as many investors and politicians hope – or is he playing a longer game aimed at permanently restructuring the global economy and America's place in it? In this new world, whether a country is an ally or an adversary depends on whether that nation is giving the US a good deal.

On Monday afternoon, Israeli Prime Minister Benjamin Netanyahu, the first world leader to visit the president since his trade announcement, tried his hand at playing Trump's new game. He pledged that his nation – which has been slotted for tariffs of 17% – would drop its trade barriers and move to eliminate its trade surplus with the US.

"We think it is the right thing to do," he said. "I think Israel can serve as a model to many countries that ought to do the same."

Other nations appear to be pursuing a similar strategy in the hopes of a positive result.

Japanese Prime Minister Shigeru Ishiba called Trump on Monday morning, prompting Treasury Secretary Scott Bessent to state that the US was beginning negotiations with the nation to "implement the president's vision for the new Golden Age of Global Trade".

European Commission President Ursula von der Leyen said Europe was "ready to negotiate" with the US, offering a mutual reduction of tariffs on industrial goods to zero – a proposal that Trump praised during remarks at the Oval Office, while saying it was still "not enough".

There were no such gestures from China. On Monday morning, America's top economic competitor announced that it was responding to Trump's 34% tariff increase with an additional 34% of its own.

That prompted Trump to threaten another 50% to US tariffs on China if it does not back down by Tuesday.

"China has chosen to isolate itself by retaliating and doubling down on previous negative behaviour," Bessent posted on X. "Over 50 countries have responded both openly and positively to Donald Trump's historic action to create a fairer, more prosperous system of global trade."

China's reaction to Trump's latest move was equally blunt.

"We have stressed more than once that pressuring or threatening China is not a right way to engage with us," Chinese Embassy spokesperson Liu Pengyu told BBC partner CBS News. "China will firmly safeguard its legitimate rights and interests."