The South African rand gained back some lost ground on Tuesday morning after testing two-year lows on Monday, in the wake of an escalating trade war between the US and China fuelled global recession fears.

After closing at R19.57 on Monday, April 7, the local currency appreciated to R19.39 to the greenback as Asian markets staged a mild rebound. However much uncertainty still exists in the market as question marks hang over Donald Trump's warning of retaliatory measures against China's tariffs announced on Friday.

The rand has lost 4.6% of its value since Trump's 'Liberation Day' announcement on April 2.

The Johannesburg Stock Exchange (JSE) took a hammering on Monday morning, opening around 5% weaker and crashing beneath the 80,000-point mark for the first time in 2025.

However, the local stock exchange clawed back marginally to close the day 0.75% higher at 82,162 at 5pm. The JSE has lost some 8.7% in value since the market volatility of April 2.

Global equities have also taken a significant knock since Trump announced sweeping tariffs against countries across the world last Wednesday, which have sparked fears of a global recession.

A catastrophic economic stand-off between the US and China is looking more likely than ever, with Trump threatening this week to counter Beijing's 34 percent retaliation tariff with an additional 50 percent levy.

In response, a spokesperson for the Chinese government said the country would never accept such a move, and referred to the potential escalation as a "mistake on top of a mistake," AFP reported.

"If the US insists on going its own way, China will fight it to the end," a spokesperson for Beijing's commerce ministry said on Tuesday.

Trump, in the midst of the economic turmoil, told Americans to "be strong, courageous and patient."

He doubled down on Monday, stating he was not looking at pausing the implementation of these controversial tariffs.

European stock markets rebounded slightly at the start of trading on Tuesday, following similar recoveries for Asian equities, AFP reported.

London's benchmark FTSE 100 index gained 1.3 percent, the Paris CAC 40 advanced 1.4 percent and Frankfurt's DAX edged up by 0.9 percent.

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