Beijing on Wednesday called for “dialogue” with Washington even as it vowed to take “forceful measures” to protect the Chinese economy from President Donald Trump’s 104 percent minimum tariffs.

A worsening trade war between the world’s two biggest economies has pushed U.S.-China tensions to a new level of confrontation that analysts say is becoming increasingly difficult to de-escalate.

Trump’s “Liberation Day” tariffs on 86 countries came into effect at 12:01 a.m. Eastern time on Wednesday, with successive increases taking the duty on all Chinese goods to 104 percent.

Beijing, which on Friday announced it would impose a 34 percent tariff on all American goods in return, did not immediately announce any further retaliatory measures Wednesday.

But China’s State Council, its equivalent of the cabinet, stressed the importance of the U.S.-China trade relationship and said that differences should be resolved “through dialogue and consultation.”

“Success for China and the United States is an opportunity for both countries, not a threat. We hope that the United States and China will meet each other halfway,” it said in a white paper released Wednesday.

At the same time, Foreign Ministry spokesman Lin Jian said China would “continue to take firm and forceful measures to safeguard its own interests.”

Before the tariffs took effect, White House spokeswoman Karoline Leavitt suggested Tuesday that Trump was open to talking — as long as Beijing made the first move.

“The president also wanted me to tell all of you that if China reaches out to make a deal, he’ll be incredibly gracious, but he’s going to do what’s best for the American people,” Leavitt said at a news briefing. “China has to call first.”

The mixed signals and the introduction of the tariffs led to another day of significant volatility in Asia, after a day of wild gyrations in U.S. markets.

Japan’s benchmark Nikkei 225 closed almost 4 percent lower, while Australia’s ASX 200 index and South Korea’s KOSPI both ended the day almost 2 percent lower.

Hong Kong’s Hang Seng Index, on which many Chinese exporters are listed, fell by almost 4 percent when trading opened Wednesday although it ended the day in positive territory.

Confounding analysts, yields on the 10-year U.S. Treasury bond — widely considered the ultimate safe haven for investors — rose sharply, sending prices falling.

“This is a highly unusual situation,” said David Scutt, Asia Pacific market analyst for StoneX, a financial services firm. “It’s incredibly rare to see moves of this magnitude in benchmark 10-year treasury yields especially in the Asian time zone.”

Analysts said Wednesday’s market moves reflected broad concern about the impact the tariffs would have on the U.S. economy.

“Many people say that by the time the Trump administration realizes how bad this is, it will be too late and the U.S. will be in a recession,” said Alicia García Herrero, chief economist for Asia Pacific at the investment bank Natixis. “So if they want to do something about this they better do it now.”

Other countries are trying hard to broker deals with the Trump administration to avert tariffs, with Treasury Secretary Scott Bessent telling CNBC that nearly 70 countries had approached the United States about negotiating over trade barriers.

Argentina, Vietnam and Israel have indicated they will drop their tariff and regulatory barriers to U.S. exports, while South Korea and Japan are now actively pursuing negotiations.

Trump said on social media Tuesday he had a “great call” with South Korea’s acting president about a potential deal to remove the 25 percent tariff Trump threatened to impose on the ally’s exports.

Beijing has hit back

But most of the focus was on China, the world’s biggest exporter and the recipient of the biggest tariffs.

Trump on Tuesday tripled the tariff rate he had announced on low-value packages from China, closing a loophole that allowed Chinese companies like Shein and Temu to sidestep duties on shipments worth less than $800. From June 1, those packages will face a tax of 90 percent of their value, up from the originally planned 30 percent duty.

While other countries have approached the White House to negotiate over the trade measures, Beijing has instead hit back with its own tariffs and deployed other measures like export controls and import bans. Escalation on both sides makes the possibility of talks less likely, analysts said.

“Beyond a certain point, further escalation loses meaning,” said Lizzi C. Lee, an economy expert at the Asia Society Policy Institute’s Center for China Analysis. “China would likely decide there’s no point in continuing to engage — and at that stage, retaliation could take forms the U.S. isn’t ready for.”

Retaliation could involve suspending cooperation to stop fentanyl and related chemicals from reaching the United States; cutting off imports of U.S. products that depend on the Chinese market like farm products, services or energy; or rapidly opening trade channels with other countries hit hard by the tariffs, Lee said.

Chinese state media on Wednesday was awash with commentary saying China could not back down.

“The weaker you are, the happier the United States is and the harder it will hit you,” said an article on Niu Tanqin, an influential blog run by a former journalist with the state news agency, Xinhua.

The longer that the trade fight goes on, the more Beijing sees U.S. moves as simply an effort to contain China. “Beijing is losing patience with the Trump team, believing that they have no sincerity in negotiating,” said Zhao Minghao, a professor at Fudan University’s Center for American Studies.

Well-connected Chinese blogs have also suggested Beijing might ban the importation of U.S. movies to China.

The steep tariffs on Chinese goods will almost certainly raise prices for American consumers on products including clothes, shoes and electronics — something Chinese state media have been at pains to point out.

“Manufacturers here cannot absorb the burden,” Liang Mei, president of the China Toy and Juvenile Products Association, was quoted as telling the state-affiliated Global Times newspaper Tuesday. U.S. retailers would shoulder part of the cost and the rest “will be passed on to American consumers,” Liang said.

Independent experts agreed.

Naomi Fink, chief global strategist at Nikko Asset Management in Tokyo, said the new tariffs will “first and foremost be a blow to U.S. consumers,” which will ultimately affect exporters to the U.S. But the ultimate impact on domestic U.S. interests is significant, and countries on the receiving end of tariffs recognize that, she said.

“The thing here, and I think China even stated it, is that the only reason they’re retaliating is because they know it’s a credible threat to the U.S. consumer, who’s also the U.S. voter, and they know the U.S. consumer is wearing the cost,” Fink said.