Chinese President Xi Jinping warns that there would be “no winners” in a trade war as US President Donald Trump has upended the global economy with his latest tariffs.

Xi began a week of diplomatic engagements in Southeast Asia with a visit to Vietnam on Monday, highlighting China’s dedication to global trade.

Despite temporarily suspending certain tariffs, Trump has made an exception for China, maintaining a significant 145% tariff on the world’s second-largest economy.

On Friday, China further raised the retaliatory tariffs to 125%, to be put into force from Saturday.

In an article published on Monday in Vietnam’s major state-run Nhan Dan newspaper, Xi reiterated Beijing’s stance that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere.” 

Washington’s repeated tariffs “will become a joke in the history of the world economy,” a Chinese Finance Ministry spokesman said in a statement.

“However, if the US insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”

Xi’s visits, starting in Hanoi, includes infrequent visits to Malaysia and Cambodia, aiming to bolster relationships with China’s nearest neighbors, while mitigating the effects of the US tariffs.

According to Xinhua news agency, Xi looked forward to an “in-depth exchange of views with Vietnamese leaders on issues concerning ties between the two parties and countries that have a global impact.”

Xi also called on both countries to firmly protect the multilateral trading system, ensure stable global industrial and supply chains, and maintain an open and cooperative international environment.

Vietnam’s top leader, To Lam, said in an article posted on the government’s news portal on Monday that his country “is always ready to join hands with China to make cooperation between the two countries more substantive, profound, balanced and sustainable.”

During Xi’s visit, Vietnam and China are set to finalize approximately 40 agreements spanning various sectors, according to Vietnam’s Deputy Prime Minister, Bui Thanh Son. Among these agreements, there is an expectation of collaboration on the development of Vietnam’s railway network.”

Vietnam, along with several other Southeast Asian nations, is navigating a complex balancing act between the US and China.

The US serves as Vietnam’s largest export market, representing 30% of the country’s GDP, while China is its primary source of imports, supplying essential raw materials and other goods needed for manufacturing exports aimed at the US market.

Historically, Vietnam has aimed to remain neutral in the US-China rivalry and is keen to avoid provoking either side, particularly as it seeks to convince Washington to reduce its 46% tariff.

Cambodia and Malaysia, facing tariffs of 49% and 24% respectively, are actively pursuing negotiations with Trump.

Meanwhile, China has expressed its determination to “fight until the end” if the United States continues to intensify the trade conflict.

On Friday, Xi called on the European Union to join Beijing in opposing the United States’ “bullying” practices as Washington’s controversial tariffs continue to shock global markets.