U.S. President Donald Trump will meet Japanese Prime Minister Shigeru Ishiba for the first time on Friday as two allies wary of China's rise work to boost business and security ties while an escalating trade war threatens to rupture the global economy.

Beijing has made its decision. After days of warning of counter measures and urging Washington to enter negotiations and "meet China halfway", it has decided to hit back – or at least threaten to retaliate with its own tariffs.

Companies across the country are bleeding cash as they struggle with overcapacity and weak spending in a slumping economy, leaving them vulnerable to tariffs.