[HONG KONG] Asian markets mostly rose Tuesday after Donald Trump said he would thump China with another round of tariffs but give some room for talks before jacking them up to the highest rate.

The latest volley from the White House will see US$200 billion worth of goods taxed at 10 per cent from September 24, going up to 25 per cent from January 1 if the sides are unable to hammer out a deal.

Mr Trump also warned that another US$267 billion had been lined up if Beijing retaliates.

With $50 billion of goods already being hit, that would mean Washington will have subjected virtually all goods China ships to the US to tariffs.

China on Tuesday warned it would "take countermeasures", adding that the "US insists on increasing tariffs, which brings new uncertainty to the consultations between the two sides".

After an early sell-off, Asian markets enjoyed a bounce on hopes officials from the world's top two economies will be able to thrash out an agreement before the end of the year.

The optimism has been boosted by the fact Mr Trump left off some key items from the latest target list, while he is also due to meet Chinese President Xi Jinping in November and will likely want a deal in place.

"While the US tariffs salvo is hardly middling, it's not as bad as it could have been, so unless China hits with draconian measures, markets should remain supported after this morning's knee-jerk reactions," said Stephen Innes, head of Asia-Pacific trading at OANDA.

"Ultimately the graduated tariff hike allows more room to negotiate before the thumping 25 percent levy gets triggered, so perhaps China may temper their response accordingly."

By the end of the day Shanghai had rallied 1.8 per cent and Tokyo was up 1.4 per cent while Hong Kong gained 0.6 per cent. Seoul gained 0.3 per cent and Wellington put on 0.5 per cent.

However, Sydney dipped 0.4 per cent and Singapore 0.1 per cent.

"There were investors who'd been thinking a 25 per cent tariff in one go is a possibility," Shogo Maekawa, a global market strategist with JPMorgan Asset Management, said. "It could be considered something good in this realm of bad things."

Regional currencies also saw an afternoon recovery having been in the red earlier. The yuan was flat, while the South Korean won and the Australian dollar were 0.3 percent higher.

The Mexican peso gained 0.2 per cent, the Russian ruble edged 0.3 per cent higher and South Africa's rand put on 0.4 per cent.

However, Indonesia's rupiah fell 0.2 per cent as it wallows around levels last seen in 1998 during the Asian financial crisis.

In early trade London was flat, Paris added 0.4 per cent and Frankfurt rose 0.3 per cent.

AFP