The Japanese economy shrank by 1.8 percent compared to the same quarter last year, as U.S. tariffs dampened automobile exports and prompted a bleak outlook for growth.

China is escalating its confrontation with Japan over Prime Minister Sanae Takaichi’s comments on Taiwan, with state media threatening major countermeasures after Beijing’s travel warnings raised the specter of economic retribution.

Beijing is flexing its might to show its displeasure with the Japanese leader’s comments about defending Taiwan, but its aggressive approach risks backfiring.

Both countries' foreign ministries have lodged serious protests with each other.