But shares in TSMC, the world's largest contract chipmaker have slipped, after US President Donald Trump said he would announce a tariff rate on imported semiconductors over the next week. He did add however, that there would be flexibility on some companies in the sector.

Small factories with tiny profit margins have played a central role in China’s international competitiveness. Many could now face disaster.

Optimistic Chinese observers even held out hope for a grand bargain with Trump over trade, TikTok – and perhaps even Taiwan. This account of how China shifted from seeking a deal to punching back with retaliatory tariffs and threatening all-out defiance is based on interviews with more than a dozen people,